Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Ebenezer Chapel Birmingham Bill [Lords],

Felixstowe and District Water Bill [Lords],

Read the Third time, and passed, with Amendments.

Ministry of Health Provisional Order Confirmation (Lancaster and District Joint Hospital District) Bill [Lords],

Read the Third time, and passed, with an Amendment.

Oral Answers to Questions — UNEMPLOYMENT.

SKILLED TRAMBS (SYSTEMS OF RECRUITMENT).

Mr. MARCUS: 1.
asked the Minister of Labour if she will consider the advisability of providing a scheme for the encouragement of the existing apprenticeship system to supersede the present system of training centres?

The MINISTER of LABOUR (Miss Bondfield): I shall be glad to do anything in my power to encourage suitable systems of recruiting boys for skilled trades, but they do not fulfil the same function as the training scheme for adults.

Mr. R. RICHARDSON: Will the right hon. Lady consult with the Board of Education on this matter, in order to see if something could not be done between the two Departments?

Miss BONDFIELD: We constantly consult about these matters, but the training scheme is for adults.

SERVICE CANTEEN VACANCIES.

Mr. McSHANE: 3 and 4.
asked the Minister of Labour (1) the total number of women disallowed benefit during the three months ended 1st June last for refusal to accept situations under the Army, Navy, and Air Force Institutes;
(2) the total number of vacancies notified to the Employment Exchanges by the Army, Navy, and Air Force Institutes during the three months ended 1st June last?

Miss BONDFIELD: The number of disallowances by courts of referees in respect of refusal of employment with the Navy, Army, and Air Force Institutes during the three months ended 1st June was 440. Information regarding the number of vacancies notified is not available, but the number of placings effected during the same period was 246.

SHARE FISHERMEN.

Lieut.-Colonel MOORE: 5.
asked the Minister of Labour whether the position of share fishermen in relation to the Unemployment Insurance Acts is to be considered by the Royal Commission on Unemployment Insurance?

Miss BONDFIELD: I understand that this matter is being considered by the Commission.

Lieut.-Colonel MOORE: Will the views of the Scottish Fishermen's Association be considered?

Miss BONDFIELD: I think they would have to apply to be heard.

WOMEN (SEASIDE EMPLOYMENT).

Mr. MANDER: 6.
asked the Minister of Labour whether, in offering employment to women at the seaside, consideration is given to the cases of daughters who have mothers wholly dependent upon them for household duties?

Miss BONDFIELD: Domestic circumstances known to the Employment Exchange, are taken into account in offering women employment at the seaside.

Mr. MANDER: Do I understand that daughters in such circumstances would be in much the same position as married women?

Miss BONDFIELD: That raises a very large question—the question of availability for employment.

RELIEF SCHEME, WOOLWICH.

Sir KINGSLEY WOOD: 7.
asked the Minister of Labour whether she has now received in reply to her circular any application from the Woolwich Borough Council submitting any unemployment schemes for the autumn and winter?

Miss BONDFIELD: The Woolwich Borough Council have now submitted for consideration by the Unemployment Grants Committee one scheme, estimated to cost £8,500, and to provide employment for 50 men for nine months. The scheme is under consideration.

Sir K. WOOD: Does the right hon. Lady know the reason for the delay, as I think she issued the circular on the 30th of the month. Will she keep in close touch with this council, having regard to the delay which has already taken place.

COURTS OF REFEREES (CHAIRMEN).

Mr. LAWTHER: 8.
asked the Minister of Labour when the White Paper will be issued dealing with the sums paid to chairmen of courts of referees, giving the amounts paid to each individual chairman?

Miss BONDFIELD: The necessary information has been collected, and the paper will be issued as soon as it can be printed.

BENEFIT DISALLOWED (PLASTERERS, EDINBURGH).

Mr. MATHERS: 10.
asked the Minister of Labour if she is aware that plasterers in Edinburgh are denied unemployment benefit because of their refusal, on the instructions of their trade union, to work for a contractor who, although paying wages over the district rate, is declared to be forcing his employés to put inferior work on houses being built for the city corporation; and what action she proposes to take?

Miss BONDFIELD: The allegation that inferior work is being put into these houses is a matter outside my province. So far as unemployment benefit is concerned, the umpire has given his decision which is final.

Mr. McSHANE: Is not that primarily a matter for the Edinburgh corporation—a charge of inferior work against a contractor?

Oral Answers to Questions — TRADE BOARDS ACT (CATERING TRADE).

Mr. McSHANE: 2.
asked the Minister of Labour if there is any further development to be reported with regard to the proposed Trade Board for the catering trade?

Miss BONDFIELD: The position remains as I described it in a reply to my hon. Friend on the 3rd June.

Sir HENRY BETTERTON: Can the right hon. Lady say when the final appeal is likely to be heard?

Miss BONDFIELD: No date has been fixed, but I understand that it is likely to be in the autumn.

Oral Answers to Questions — NATURALISATION CERTIFICATES (COST).

Mr. MARCUS: 12.
asked the Secretary of State for the Home Department if, in view of the fact that a large number of persons who have resided in this country for many years are prevented from applying for certificates of naturalisation because of the cost involved, he will consider the advisability of reducing the charges in such cases?

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Clynes): I have no reason to think that the present fee is having the effect stated in the question, and in view of the amount of work entailed I am afraid I cannot hold out any expectation of a reduction. I am always ready to consider sympathetically, and to recommend to the Treasury, an application for the reduction of the fee in any special case of hardship.

Oral Answers to Questions — CAPITAL PUNISHMENT (EXECUTIONERS).

Mr. MATTERS: 14.
asked the Home Secretary if persons on the official panel as State executioners are entitled to a pension or retiring allowance at the end of their period of service?

Mr. CLYNES: The answer is in the negative.

Mr. MATTERS: Can the right hon. Gentleman say why these officers are treated differently from other officers of the law?

Mr. CLYNES: They are employed by and paid by the sheriffs as occasion arises, and they are therefore in a position quite different from that of other State servants.

Mr. McSHANE: Paid by results.

Oral Answers to Questions — POLICE.

ADMINISTRATION, HEREFORD.

Mr. MATTERS: 15.
asked the Home Secretary if, in view of the petition he has received from Hereford regarding public dissatisfaction with the administration of the police services of that city ho proposes to withhold payment of the State grant until he is satisfied that such payment is warranted?

Mr. CLYNES: My hon. Friend may be assured that grant will not be paid in this or any other case until I am satisfied that the conditions upon which the payment of grant depends have been fulfilled.

Mr. FRANK OWEN: If I can satisfy the Home Secretary that there is very genuine concern in the city of Hereford about the administration of the police, will he promise that there shall be a public inquiry into it?

Mr. CLYNES: I appreciate the point of the question. Probably the hon. Member knows that certain disciplinary proceedings have either been taken or are in abeyance, and I cannot therefore at this stage give a definite pledge, but I shall keep in mind the point of the question.

SUPERINTENDENTS, LONDON (RETIREMENT).

Mr. MATTERS: 16.
asked the Home Secretary how many years a superintendent of the Metropolitan Police must serve in that rank before he can retire on a full pension as a superintendent; how many superintendents have been retired on pension since Lord Byng became Commissioner in October, 1928; how many of these retired officers had reached their
maximum pensionable scale in the rank of superintendent; and what was the average period of service of these men in that rank?

Mr. CLYNES: In order to reach the maximum pay of his rank a superintendent must have served in the rank for six years, and in order to qualify for the maximum pension on that rate of pay he must have had 26 years' approved service. Nineteen superintendents have retired on pension since the date mentioned, 12 of them had reached the maximum pay of the rank and their average service in the rank was seven years.

Mr. MATTERS: Does the right hon. Gentleman know whether any of these superintendents were told to retire?

Mr. CLYNES: These are points to which I could not give a satisfactory answer without notice.

CHIEF CONSTABLES (APPOINTMENT).

Mr. R. A. TAYLOR: 20.
asked the Home Secretary if police service in India is treated by his Department as approved police service within the meaning of the regulations, in respect of the appointment in England of chief constables of police?

Mr. CLYNES: Yes, Sir, but service in a police force in India does not, of course, count as approved service for purposes of pension in this country.

Mr. TAYLOR: In view of recent appointments by standing joint committees, is the right hon. Gentleman satisfied that ordinary police officers who spend their lives in police work get a fair chance of promotion to the higher posts on their merits?

Mr. SPEAKER: That hardly arises out of the question.

METROPOLITAN FORCE (INQUIRY).

Sir NICHOLAS G RATTAN -DOYLE: 24.
asked the Home Secretary the present position of the inquiry into charges of bribery against members of the Metropolitan Police Force; and why decisions have not yet been reached?

Mr. CLYNES: I am informed by the Commissioner of Police that the inquiry is still proceeding and is likely to take
a considerable time for the reason that there are a large number of cases and many witnesses to be heard. Every endeavour is being made to press it to a conclusion.

Oral Answers to Questions — JURORS (EXPENSES).

Mr. MESSER: 17.
asked the Home Secretary if he is aware of the hardship inflicted on many small business men by being compelled to attend several days as jurors without expenses; and if he will inquire into the possibilities of establishing a fund for the payment of jurors' expenses?

Mr. CLYNES: I recognise that cases of hardship may occur, but I regret that I do not feel able to consider a proposal to place a new charge of this character on public funds.

Oral Answers to Questions — CINEMATOGRAPH FILMS (CENSORSHIP).

Mr. DAY: 18.
asked the Home Secretary whether, in view of the various decisions arrived at by local licensing authorities with regard to films that have been refused an exhibition certificate by the British Board of Film Censors, he will consider introducing legislation which will permit film producers or renters to appeal to his department against these decisions instead of, as at present, having to apply to the local licensing authority in each town?

Mr. CLYNES: No, Sir. I think the local licensing authority should remain responsible for deciding what films should be exhibited in its area.

Mr. DAY: Is the right hon. Gentleman aware that these film companies have to make an appeal in each town separately, after a film has been rejected by the British Board of Film Censors, and does he not think it a great hardship?

Mr. CLYNES: Compared with the number of films and the number of houses, these incidents are very rare and would not justify a complete change in the system.

Oral Answers to Questions — RONALD TRUE.

Mr. SORENSEN: 21.
asked the Home Secretary the nature of the latest report
that he has received on the condition of Ronald True, at present detained in Broadmoor lunatic asylum?

Captain W. G. HALL: 19.
asked the Home Secertary what is the latest report he has received on the condition of Ronald True, at present detained in Broadmoor?

Mr. DAY: 22.
asked the Home Secretary when the sentence passed upon Ronald True, the ex-airman who was convicted for the murder of Gertrude Yates in a Fulham flat in 1922, was last reviewed; and what decision was arrived at?

Mr. CLYNES: The case came under review this month upon receipt of the usual annual report which showed that there was no change in True's condition. No new decision was called for or taken. I may add there is no truth whatever in the statements which have recently appeared in the Press with regard to this man.

Mr. SORENSEN: May I take it from the reply of the right hon. Gentleman that it is not anticipated that this particular patient will improve at an early date?

Mr. SPEAKER: The Home Secretary can hardly answer that question.

Mr. DAY: Can my right hon. Friend say whether there is any way of dealing with these unofficial reports, which may cause a lot of pain to relations and other people?

Mr. CLYNES: There is only this way of answering, publicly, these statements, and I hope that the papers concerned will see that the reply is printed.

Oral Answers to Questions — LOTTERIES AND SWEEPSTAKES.

Mr. DAY: 23.
asked the Home Secretary what instructions have been recently issued by his Department to intercept communications passing between Great Britain and foreign countries offering for sale tickets in lotteries and sweepstakes; has he any records of the number of letters or tickets so intercepted; and will he give particulars?

Mr. CLYNES: The practice in regard to such communications was stated by
my hon. Friend the Postmaster-General on the 28th instant in reply to a question by the hon. and gallant Member for Taunton (Lieut.-Colonel Gault), and no further instructions in this matter have been necessary. It would not be in the public interest to give the further information requested.

Mr. DAY: Is the right hon. Gentleman aware that during the last fortnight very many letters have been delivered which came from the Continent?

Mr. CLYNES: I can only say whatever is possible is done to prevent that, because these transactions are illegal.

Oral Answers to Questions — EDUCATION (WOMEN TEACHERS).

Mr. MORLEY: 25.
asked the President of the Board of Education the number of certificated women teachers employed in England and Wales at the last convenient date and the number who were compelled to resign on marriage during the year 1930–31?

The PRESIDENT of the BOARD of EDUCATION (Mr. Lees-Smith): The number of certificated women teachers in regular employment on 31st March, 1930, was 84,979. I have no information which would enable me to answer the second part of the question.

Oral Answers to Questions — PUBLIC HEALTH.

MEDICAL OFFICERS' REPORTS.

Lieut.-Colonel FREMANTLE: 26.
asked the Minister of Health if he can arrange that the annual reports of medical officers of health, giving the vital statistics for the year under review, shall always give also the corresponding figures for the previous year and for the previous decades for which the figures are available?

The MINISTER of HEALTH (Mr. Arthur Greenwood): It is open to a medical officer of health to include in his annual report any information which he considers it desirable to give. I do not, however, consider it necessary to require medical officers of health to include in their annual reports comparative figures on the lines suggested by the hon. and gallant Member, as a comparison year by
year of the vital statistics for any administrative area can readily be obtained from an examination of the annual reports of the medical officer of health for that area or from the Statistical Review issued annually by the Registrar-General.

Lieut.-Colonel FREMANTLE: Does not the Minister recognise that the whole value of statistics is that they should be comparative in order to show whether there is progress, and that therefore it is essential to have the previous figures?

Mr. GREENWOOD: The hon. and gallant Member said last night that we must have economy in social services, and this is one of the economies that can be undertaken.

Lieut.-Colonel FREMANTLE: There will be no lack of economy in carrying out the suggestion.

Lieut.-Colonel FREMANTLE: 27.
asked the Minister of Health why Circular 1296, as to the contents of the annual reports of medical officers of health, does not ask for any report as to venereal diseases or vaccination under the vaccination laws; and whether he will take steps to include these matters to be dealt with in future?

Mr. GREENWOOD: As regards venereal diseases, annual returns of the work done at the treatment centres are already furnished to my Department by the medical officers in charge of the centres, but I will consider whether in future medical officers of health should be requested to deal specially with this subject in their annual reports. As regards vaccination, this work has only recently been transferred to the local authorities, and the question whether medical officers of health should be asked to deal in future with this subject in their annual reports will be considered.

TUBERCULOSIS (UMCKALOABO TREATMENT).

Mr. SMITHERS: 33.
asked the Minister of Health whether, in view of the testimonials that have been sent to him as to the efficacy of the treatment for tuberculosis called Umckaloabo and in view of the importance of finding a cure for tuberculosis, he will reconsider his decision and instruct his experts to reexamine this method of treatment and to use every means at his disposal to make this treatment known to the public?

Mr. GREENWOOD: The testimonials sent to me by the hon. Member have been considered by my advisers, and I find no reason to reconsider my view that there is not sufficient ground for instituting a clinical investigation into the value of this alleged remedy for tuberculosis.

Mr. MUFF: Will the right hon. Gentleman give the name?

Mr. GREENWOOD: I am afraid that I cannot pronounce it.

Mr. SMITHERS: In view of the numerous testimonials which prove the efficiency of this treatment, will not the right hon. Gentleman reconsider his decision and have more inquiries made?

Mr. GREENWOOD: The hon. Member is much in the same position as I am. We are both laymen, and I must rely on my advisers.

Mr. SMITHERS: Will the right hon. Gentleman ask his advisers to reconsider this matter, and go into it again in view of these testimonials?

Mr. GREENWOOD: Since the hon. Gentleman has shown such interest in it, I have done so, and their advice is the same as it was before.

Mr. SMITHERS: Why could not the right hon. Gentleman say so before?

CANCER (DIAGNOSIS).

Dr. MORRIS-JONES: 37.
asked the Minister of Health whether his attention has been called to the recent investigations of Dr. Bendien, of Holland, into the possibility, by means of blood tests, of making the diagnosis of cancer in its early stages certain; and whether he will secure a report from the Medical Research Council upon this method?

Mr. GREENWOOD: My attention has been drawn to this matter and, in common with all other investigations with regard to this disease which come to notice, it will be considered by the Departmental Committee on Cancer on which the Medical Research Council is represented.

Dr. MORRIS-JONES: Is the right hon. Gentleman satisfied that his Department gives sufficient support and encouragement to the investigators of the highest eminence in regard to the investigations that they are carrying out?

Mr. GREENWOOD: I shall be glad if the hon. Gentleman will give me information in regard to any cases where it does not.

Mr. HANNON: Is the right hon. Gentleman aware that Dr. Bendien is in London, and will his advisers come into contact with this distinguished gentleman?

Mr. GREENWOOD: If he will make representations, I have no doubt that that will be arranged.

Mr. SMITHERS: Why does the right hon. Gentleman refuse to take notice of these experiments?

Mr. GREENWOOD: I think that I have shown that I have not refused to take notice of them.

Sir N. GRATTAN-DOYLE: 53.
asked the Minister of Health whether he is aware of recent successful attempts at the diagnosis of cancer by means of blood tests; and whether any special financial assistance is being given by his Department to further this particular line of research under hospital conditions in Great Britain?

Mr. GREENWOOD: I assume that the hon. Member has in mind the investigations which are being undertaken by Dr. Bendien in Holland. This matter will receive the attention of the Departmental Committee on Cancer, and any recommendations of that Committee as to the desirability of further investigations will receive my careful consideration.

PRIVATE NURSING HOMES.

Mr. MORLEY: 39.
asked the Minister of Health the number of private nursing homes in London and the provinces; how many inspections of these establishments have been carried out during the last 12 months; and what were the general findings of such inspections?

Mr. GREENWOOD: The administration of the Nursing Homes Registration Act, 1927, including the registration of homes and the inspection of premises, is in the hands of the local supervising authorities established under the Act, usually the councils of counties and county boroughs, and I am afraid that the information desired by my hon. Friend is not in my possession.

SEWAGE SCHEME, TIMSBURY, CLUTTON.

Mr. GOULD: 50.
asked the Minister of Health whether he has received the report of the public inquiry regarding the proposed sewage works at Timsbury, in Clutton rural district and when sanction may be expected to the scheme?

Mr. GREENWOOD: The inspector's report has been received and considered. The scheme has been approved in principle and the local authority are now preparing revised plans embodying certain suggestions which have been made to them. As soon as the plans are received formal sanction will be given.

Mr. GOULD: Can the right hon. Gentleman say whether the difficulty about the site has been overcome?

Mr. GREENWOOD: I understand all difficulties have been overcome now.

NURSES AND MIDWIVES (TELEPHONES).

Mr. BEN RILEY: 51.
asked the Minister of Health whether he will take steps to give financial assistance in aid of the installation of telephones in the residences of qualified nurses and midwives in rural districts and villages?

Mr. GREENWOOD: I have no funds at my disposal out of which assistance of this kind could be given, but the county councils have power to make the necessary arrangements so far as midwives are concerned.

Mr. RILEY: Will the right hon. Gentleman do all that he can to get the county councils to use their powers?

Mr. GREENWOOD: I have already done that.

WATER SUPPLY, CHESSINGTON, SURREY.

Mr. EDE: 54.
asked the Minister of Health whether, pending his decision on the proposal of the Surrey County Council to add part of the parish of Chessington to the urban district of Epsom, he will decline to sanction any arrangement whereby Chessington would be placed in the area of any water undertaker other than the urban district council of Epsom?

Mr. GREENWOOD: The parish of Chessington is already wholly within the statutory limits of supply of the Metropolitan Water Board, and my sanction is not required to any arrangements for the supply of water in the parish by the Board.

Oral Answers to Questions — HOUSING.

RURAL AUTHORITIES BILL (ADVISORY COMMITTEES).

Sir K. WOOD: 43.
asked the Minister of Health if he is now able to announce the composition of the Advisory Committee under the Housing (Rural Authorities) Bill?

Mr. GREENWOOD: The composition of the committee will be as follows:
My right hon. Friend the Member for Penryn and Falmouth (Sir J. Tudor Walters), Chairman.

Sir George Barstow.
Mr. E. W. Cemlyn-Jones.
Sir Theodore Chambers.
Mr. R. Coppock.
Sir Valentine Crittall.
Mr. E. G. Gooch.
Mrs. Peter Hughes-Griffiths.
Mr. Alan Rae Smith.
Sir J. Walker Smith.
Sir Seymour Williams.

Mr. SULLIVAN: 79.
asked the Secretary of State for Scotland whether he is in a position to announce the names of the persons whom it is proposed to appoint as members of the Scottish Committee to be set up under the Housing (Rural Authorities) Bill?

The SECRETARY of STATE for SCOTLAND (Mr. William Adamson): The names of the persons whom it is proposed to appoint as members of the committee referred to are as follow:

Sir William E. Whyte (Chairman).
Provost A. M. MacEwen.
Mr. Alexander Robb.
Mr. James C. Cessford.
Miss Bella Jobson.
Mr. John Train, M.P.
Mr. Adam McKinlay, M.P.

RETURNS.

Lieut.-Colonel FREMANTLE: 28.
asked the Minister of Health if he will arrange for an annual return to be published on the subject of housing, detailing in each local government area the number of houses in occupation, the number of new houses erected during the year under the several Housing Acts, the number of houses reconditioned under the Housing (Rural Workers) Act, 1926, and the number of houses included and dealt with during the year in clearance and improvement areas under the 1930 Act, in
addition to the number of houses dealt with, as commonly reported in the reports of medical officers of health?

Mr. GREENWOOD: While I agree that such a return as the hon. and gallant Member suggests would offer certain advantages if it could be issued very shortly after the close of the period to which it relates, I fear that it would not be practicable to secure that early issue, and in these circumstances I do not think the value of the return would be a reasonable compensation for the expenditure of the time, labour and money involved.

Lieut.-Colonel FREMANTLE: Will the Minister, then, consider some way of amalgamating the innumerable different statements and returns that are compiled so as to save a great number of questions which overlap each other in this House?

Mr. GREENWOOD: I will certainly consider that and discuss it with the hon. and gallant Gentleman.

Oral Answers to Questions — POOR LAW.

TEST WORK.

Mr. MARCUS: 30.
asked the Minister of Health if, in view of the increasing practice on the part of public assistance committees to require unemployed applicants for relief to perform, as a condition of receiving such relief, work which should be done in the normal way at trade union rates of wages, he will take steps to bring this practice to an end?

Mr. GREENWOOD: I am not aware of any general tendency on the part of public assistance authorities to displace paid labour in the manner suggested, nor would I give my approval to schemes involving substitution of test labour for ordinary employment. I should be glad to make inquiries into any case in which there is evidence of such substitution.

Mr. HORE-BELISHA: 31.
asked the Minister of Health whether he will issue a regulation making better arrangements for those who are performing task work, seeing that they are at a disadvantage in not being available to go in search of work and to be interviewed by prospective employers during many hours of the working day?

Mr. GREENWOOD: I understand that the hours of work are usually arranged by public assistance authorities so as not to interfere with such regular opportunities for work-seeking as are customary in the locality, and that arrangements are also made for special leave of absence to be granted to any man who has the definite offer of a job. I do not think, therefore, that there is occasion for any further regulations in the matter.

Mr. HORE-BELISHA: Is the right hon. Gentleman aware that the matter is entirely within the discretion of the local authority and, if it is, would he issue a general recommendation so as to make the practice of giving facilities uniform?

Mr. GREENWOOD: The matter is one for the local authority. I have already made representations, and I am prepared to do so again in any case brought to my notice.

BLEAN INSTITUTION, HERNE.

Sir WILLIAM WAYLAND: 34.
asked the Minister of Health whether he has considered a communication dated 4th March, 1931, sent to him by the Herne Bay Urban District Council, asking him to use his influence with the Kent County Council to bring about such adjustments as would prevent the proposed removal of the sick and aged inmates from the Blean Poor Law Institution at Herne to make room for insane patients from Chatham; whether he has considered similar communications from the Herne Bay branches of the National Citizens' Union and the Ratepayers' Association; whether he has considered the petition signed by ratepayers and residents of Herne Bay on the same question; and what action has been, or is proposed to be, taken by the Minister on the foregoing communications and petition?

Mr. GREENWOOD: I have received the communications referred to in regard to the proposed removal of the sick and aged inmates from the Blean Poor Law Institution and am in communication with the county council in regard to the future use of the institution.

SINGLE MINERS, WHITEHAVEN (RELIEF).

Mr. PRICE: 44.
asked the Minister of Health whether he is aware that single men involved in the coal dispute at Whitehaven have been refused assistance
from the Cumberland Public Assistance Committee; and whether he will make representations to this body with a view to the granting of assistance in such cases?

Mr. GREENWOOD: The answer to the first part of the question is in the affirmative. As regards the second part, I have, in a circular to public assistance authorities, given what assistance I could in the interpretation of the Judgment in the case of Attorney-General v. Merthyr Tydvil, but I have no power to require or even to authorise the grant of relief to persons who are, on the facts before the authority, precluded from receiving relief by the terms of that Judgment as being involved in a dispute.

Mr. PRICE: Is the right hon. Gentleman aware that there is very serious distress in the coalfields as a result of this decision, and can ho see his way to do something in the matter?

Mr. GREENWOOD: The decision is not mine; it is a decision of the Law Courts.

Oral Answers to Questions — PUBLIC WORKS (BRITISH MATERIALS).

Dr. MORRIS-JONES: 32.
asked the Minister of Health whether he is aware that the inspectors of the Ministry of Health recommend for works carried out by local authorities with his sanction certain specified materials made in Belgium and Germany, respectively, in preference to British materials; and will he inquire into the matter?

Mr. GREENWOOD: I am not aware that the position is as stated, but if the hon. Member has in mind particular instances and will communicate with me, I shall be happy to make inquiries.

Oral Answers to Questions — NATIONAL HEALTH INSURANCE.

UNEMPLOYED PERSONS.

Sir K. WOOD: 35.
asked the Minister of Health whether he has given further consideration to the position of unemployed persons who are members of approved societies in December next; and whether he will be in a position after the Summer Recess to make proposals to the House for the purpose of dealing with this problem?

Mr. GREENWOOD: The answer to the first part of the question is in the affirmative. As regards the second part, I hope to be in a position to make a statement shortly after the Recess.

Sir K. WOOD: Will the hon. Gentleman observe the latter part of my question?

Mr. GREENWOOD: A statement usually contains proposals or something approaching them.

Sir K. WOOD: It may very well contain nothing at all.

MEDICAL TREATMENT.

Lieut.-Commander KENWORTHY: 36.
asked the Minister of Health the regulations whereby panel doctors are forbidden to give certain medical treatment to panel patients which would be given to private paying patients and which treatments are in general use in private medical practice; and what are the reasons for this prohibition?

Mr. GREENWOOD: I am not aware of any such regulations as my hon. and gallant Friend mentions. Insurance practitioners are required in all ordinary cases to give to their patients all proper and necessary medical services other than those involving the application of such special skill and experience as is not to be expected of general practitioners as a class and to order or supply such drugs and prescribed appliances as are requisite for the treatment of any patient.

RHEUMATIC DISEASES.

Mr. GRAHAM WHITE: 38.
asked the Minister of Health the approximate amount of national health benefit paid in any recent years in respect of sickness arising from rheumatic diseases?

Mr. GREENWOOD: The information desired by the hon. Member is not available and could only be obtained as the result of a special investigation and return by every one of about 7,000 approved societies and branches. It has, however, been estimated on good authority that one-seventh of the total invalidity amongst insured persons is due to rheumatic diseases, and on this basis the cost involved for the year 1930 would have been about £2,500,000.

APPROVED SOCIETIES (SURPLUSES).

Mr. THOMAS LEWIS: 40.
asked the Minister of Health the total surpluses disclosed by approved societies as the result of the second and third valuations, respectively?

Mr. GREENWOOD: The total of the surplus funds of approved societies and branches as ascertained at the second valuation amounted to £42,413,319, from which amounts totalling £26,619,161 were certified for distribution in additional benefits in the ensuing quinquennium. The summarised results of the third valuation are not yet available but will be embodied in the report of the Government Actuary, which I understand will be issued shortly after the Recess.

BENEFIT CLAIMS.

Mr. T. LEWIS: 41.
asked the Minister of Health if he will state, in connection with the control of expenditure on sickness and disablement benefits among approved societies, what action he proposes to take in regard to medical practitioners undertaking insurance work, in view of the statement made in Circular A.S. 278, issued by his Department, that many insured persons claim benefit who, on reference to an independent medical referee, would be found capable of work?

Mr. GREENWOOD: I have already addressed to all insurance medical practitioners a memorandum (Memo. 329 /IC) on this subject, and I am sending my hon. Friend a copy for his information. Provision has also been made by an amendment of the Medical Benefit Regulations for dealing with cases where medical practitioners are found after due inquiry to have failed to exercise reasonable care in the issue of certificates.

DENTAL SERVICES.

Mr. T. LEWIS: 42.
asked the Minister of Health if he will lay upon the Table a statement of the expenditure of the Regional Dental Service and the Dental Benefit Council, showing the cost of establishing the organisation, the number of cases dealt with, and the running expenses?

Mr. GREENWOOD: I will bring my hon. Friend's request to the notice of the Dental Benefit Council.

Mr. LEWIS: Has the right hon. Gentleman not the power to issue these statements for which I ask?

Mr. GREENWOOD: We have always taken the advice of our advisory council, and I think we should do so in this case.

Mr. LEWIS: Would it be possible for me to receive the statement during the Adjournment?

Mr. GREENWOOD: I will consider that point with my hon. Friend if he will see me afterwards.

ASTHMA (TREATMENT).

Lieut.-Commander KENWORTHY: 49.
asked the Minister of Health if he is aware that eases have occurred where panel doctors have desired to give treatment by injections of asthmalysin for the cure of panel patients of asthma, but the doctors have been prevented from doing so by the regulations or have been surcharged for giving the treatment; and if he will inquire into the matter with a view to enabling this treatment to be given?

Mr. GREENWOOD: No, Sir. No regulations have been made under the National Health Insurance Act which would preclude an insurance doctor from administering the drug in question when necessary for his treatment of an insured patient, nor am I aware of any case in which a surcharge has been made.

Lieut.-Commander KENWORTHY: I am much obliged to the right hon. Gentleman, but would he mind telling me this: Could a doctor who prescribed this drug be called upon to justify its prescription and be surcharged if he were not able to make out his case?

Mr. GREENWOOD: The regulations against extravagant prescribing might operate in certain cases, but I will discuss the matter with ray hon. and gallant Friend if he wishes it.

Oral Answers to Questions — FACTORY ACTS.

Mr. CHARLES WILLIAMS: 45.
asked the Prime Minister when it is proposed to introduce legislation to amend the Factory Acts?

The PRIME MINISTER (Mr. Ramsay MacDonald): I am not at present in a position to make a statement.

Mr. WILLIAMS: Will the Prime Minister assure the House that such an important social Measure will have preference over, say, the Electoral Reform Bill when we come back?

Lieut.-Colonel FREMANTLE: Will the right hon. Gentleman remember that this was the only social Measure promised in the King's speech when the present Government first took office?

The PRIME MINISTER: I am sorry that I cannot remember what is not a fact.

Oral Answers to Questions — CIVIL SERVICE (PAY AND BONUS).

Mr. HANNON: 55.
asked the Chancellor of the Exchequer whether he will be prepared to make a statement, on the re-assembly of Parliament, on the attitude of the Treasury towards the recommendations of the Royal Commission on the Civil Service that basic salary and the cost-of-living bonus should be consolidated?

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): The House will be informed at the earliest opportunity of the decision taken in this matter by His Majesty's Government.

Mr. HANNON: Meantime, will there be no interference with the bonus payments to the lower-paid civil servants?

Mr. SNOWDEN: I have already given several replies to that question.

Oral Answers to Questions — NATIONAL DEBT.

Mr. COCKS: 56.
asked the Chancellor of the Exchequer what was the burden of the National Debt in terms of commodities in 1925 and 1930, respectively, as compared with 1920?

Mr. P. SNOWDEN: I doubt whether any trustworthy calculation of the burden of the National Debt in terms of commodities is possible.

Mr. COCKS: Would it be a conservative estimate to say that the burden of the National Debt has been doubled in the last 10 years?

Mr. SNOWDEN: No, I do not think so; but my hon. Friend can easily make a calculation for himself by taking the figures of the gross National Debt and the index figures; but I would warn him that the result will not be very reliable.

Mr. COCKS: Does the right hon. Gentleman not realise that this is one of the most important questions of the day; that part of our present discontents are due to the rapid deflation undertaken by the Treasury in the last 10 years? May I have an answer to that question?

Mr. SMITHERS: We do not get answers.

Oral Answers to Questions — NEWSPAPER ADVERTISEMENTS (TAXATION).

Mr. CAMPBELL: 57.
asked the Chancellor of the Exchequer whether, in deciding upon any new taxation during the current year, he will consider the advisability and probability of a large revenue being raised from a moderate tax on newspaper advertisements?

Mr. P. SNOWDEN: The hon. Member's suggestion has been noted; and I may add that, of the many suggestions for new taxation which reach me, this one and a tax on cats are the most common.

Oral Answers to Questions — PENSIONS (INCREASE) ACTS.

Mr. HORE-BELISHA: 59.
asked the Financial Secretary to the Treasury if he is now in a position to say whether the revised form of inquiry into means will be issued to ex-employés of local authorities?

The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): As I informed the hon. Member on the 21st April, this subject has been under the consideration of the Departments concerned, and I anticipate that revised regulations under the Pensions (Increase) Acts will be made shortly.

Oral Answers to Questions — AGRICULTURE.

MALE WORKERS.

Mr. C. WILLIAMS: 60.
asked the Minister of Agriculture if figures are now available showing the decrease or in-
crease of the number of male workers employed on agricultural holdings of above one acre during the year ending 4th June last?

The MINISTER of AGRICULTURE (Dr. Addison): A preliminary statement will shortly be published by my Department, and I will send the hon. Member a copy.

Mr. C. WILLIAMS: But could not the right hon. Gentleman tell us the numbers now?

Dr. ADDISON: No. The information is being prepared.

FOOT-AND-MOUTH DISEASE.

Mr. ROSBOTHAM: 61.
asked the Minister of Agriculture the present position with regard to the recent serious outbreaks of foot-and-mouth disease?

Dr. ADDISON: No outbreak of disease has been confirmed since the 15th July, and the only districts in Great Britain which are now subject to restrictions are small areas in Buckinghamshire, Lancashire and Fifeshire. Providing no further outbreaks are confirmed, I propose to withdraw all movement restrictions by the middle of August. I should like to take this opportunity of paying tribute not only to the work of the Ministry's staff, at Headquarters and in the field, who applied themselves unremittingly to the task of suppressing the outbreaks, but also to the willing co-operation of local authorities and their officials, backed by the active support of farmers' organisations and of farmers individually, without which the outbreaks could not have been prevented from disastrous extension.

Oral Answers to Questions — RIVER LEE (FLOODING).

Mr. MESSER: 62.
asked the Minister of Agriculture if he is aware that at certain seasons of the year the banks of the River Lee at Stamford Hill, Tottenham, are under water and that the condition of the towing path is a danger to those using it; and if be will bring this matter before the Lee Conservancy Board with a view to effecting an improvement in the condition of the river banks at this spot?

Dr. ADDISON: I am not aware that the particular flooding to which my hon.
Friend refers has been brought to the attention of my Department, at all events in recent years, but I will certainly communicate with the Lee Conservancy Board on the subject, as he suggests.

Oral Answers to Questions — TRANSPORT.

ROADS, FEN DISTRICTS.

Mr. de ROTHSCHILD: 64.
asked the Minister of Transport whether it is his intention to improve the roads in the Fen districts which are so badly adapted to modern conditions as to be both impracticable and dangerous?

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Parkinson): The responsibility for the initiation and execution of road improvement schemes rests with the highway authorities concerned. My right hon. Friend is prepared to consider such applications as may be submitted to him by the responsible authority for assistance from the Road Fund in respect of the improvement of important roads in the Fen districts.

Mr. de ROTHSCHILD: In view of the dangerous condition of the roads to many farmers in the Fen lands could not the. Minister take the initiative in the matter?

Mr. PARKINSON: I cannot take the initiative, because the local authorities are responsible.

ROAD TRAFFIC INQUIRY, STOCKTON.

Mr. F. F. RILEY: 66.
asked the Minister of Transport whether his attention has been called to the meeting of the Road Traffic Commissioners of the Northern area held at Stockton on the 21st instant; whether he is aware that witnesses were subjected by members of the Commission to methods of cross-examination and comments of an unusual character; and whether he will have the matter fully inquired into?

Mr. PARKINSON: My right hon. Friend has received a letter of complaint on the subject and has replied that, whilst he regretted it if anything occurred at the particular hearing which left the Mayor with a sense of grievance, he felt sure that it was the desire of the Traffic Commissioners to show proper consideration to all parties appearing
before them. The Commissioners occupy an independent position and my right hon. Friend has no desire to interfere with their discretion.

Mr. RILEY: Is the Minister aware that the witness referred to is practically charged with giving false evidence?

Mr. PARKINSON: I do not think that my right hon. Friend has any other information except that which has been published in the Press, and he has already addressed a letter to the Mayor of the Borough.

Mr. RILEY: Is the Minister aware that the witness referred to has, within the last three days, furnished the Minister with a typescript of the whole of the evidence?

Mr. PARKINSON: I am not aware of that fact, but I know that cuttings from the newspapers have been supplied to the Minister, and, in reply, my right hon. Friend has sent a letter to the Mayor explaining the position. I think that when the Mayor receives that letter, he will be perfectly satisfied that the Department has done all it can do.

Oral Answers to Questions — TEES CONSERVANCY COMMISSION.

Mr. MANSFIELD: 67.
asked the Minister of Transport whether, in view of the changed conditions since the Tees Conservancy Commission was formed, he is prepared to institute an inquiry into the claim of the Eston, Thornaby, Redcar, and Billingham districts to direct representation on the Commission, especially in view of the fact that the village of Yarm is now entitled to appoint two representatives, and that the Borough of Middlesbrough and the Borough of Stockton are likewise in a position to nominate members on the Commission?

Mr. HERRIOTTS: 65.
asked the Minister of Transport if he is aware that the Urban District Council of Billingham has no direct representative on the Tees Conservancy Commission; and whether, in view of the size, importance, and special interests of this council, he will take the necessary steps to readjust the representation or add two representatives of the council to the Commission?

Mr. PARKINSON: My right hon. Friend is aware that the local authorities of the districts mentioned have not the right of appointing representatives on the Tees Conservancy Commission. Private Bill Legislation would be necessary to authorise such an amendment of the constitution of the Commission, and the matter appears to be primarily one for the consideration of the Commission themselves.

Mr. MANSFIELD: Is the Parliamentary Secretary aware that the work performed by this Commission is of vital importance to the urban district of Eston and the borough of Redcar, and will he not consider providing them with proper representation on this Commission?

Mr. PARKINSON: My right hon. Friend is aware of all that, and in order to make the choice wider he was given power of appointment. This is a matter for private Bill legislation.

Miss WILKINSON: Has the Parliamentary Secretary had any complaint as to what has been done by the Tees Conservancy Commission?

Mr. PARKINSON: I am not aware of any complaints having been received only so far as relates to appointment on the Board by outside authorities.

Oral Answers to Questions — TRADE AND COMMERCE.

COTTON INDUSTRY (REORGANISATION).

Mr. DOUGLAS HACKING: 68.
asked the President of the Board of Trade whether he has anything to report regarding the reorganisation of the cotton industry; and whether the information on production and potential capacity in the various sections of the industry has been forthcoming on a voluntary basis?

The PRESIDENT of the BOARD of TRADE (Mr. William Graham): I understand that there has been a satisfactory response on the part of the firms in the industry to the request of the Joint Committee of Cotton Trade Organisations for information as to production and capacity, and that a report prepared by the Executive of the Committee on the basis of the information received is being considered by a full meeting of the Committee to-day.

Mr. HACKING: Does the right hon. Gentleman still hold the view that the inquiries of the Government will have served any useful purpose?

Mr. GRAHAM: Oh, yes. We have to take this matter in stages. I wish they were faster, but we are making progress.

Mr. HACKING: Is it not a fact that the industry itself is carrying out the reorganisation of the industry, and not the Government?

Mr. GRAHAM: We undertook the investigations and we are securing the cooperation of both sides of the industry in this process.

Mr. HAMMERSLEY: Could the President say whether he has any plan as to what is going to take place when the inquiry is completed and the information has been obtained?

Mr. GRAHAM: Oh, yes. There are many proposals in view, but I could not enlarge upon them in reply to a supplementary question.

Sir K. WOOD: Will they be as successful as all the other efforts of the right hon. Gentleman?

Mr. REMER: Are we to adjourn for 2½ months without any information upon this question?

Mr. GRAHAM: The hon. Member on that point has really no case. I have challenged debate but could not get it.

GERMAN HOSIERY AND KNITTING MACHINES (IMPORTS),

Mr. CHARLES BROWN: 69.
asked the President of the Board of Trade if he will state the number of machines for the manufacture of hosiery imported into this country from Germany during the years 1926, 1927, 1928, 1929 and 1930 respectively?

Mr. W. GRAHAM: The number of complete hosiery making machines imported into the United Kingdom is not separately recorded, but the total weight of hosiery and knitting machines and parts thereof imported into the United Kingdom from Germany for the years 1926 to 1930 was 355, 582, 1,286, 1,536 and 854 tons respectively.

Mr. BROWN: Is the right hon. Gentleman aware that the hosiery manu
facturers, who are benefiting by this subsidy, are increasingly installing this machinery, and can he explain the peculiar mentality of these protected hosiery manufacturers?

FLOUR MILLS.

Commander BELLAIRS: 71.
asked the President of the Board of Trade if he is aware that many flour mills have ceased to operate in the United Kingdom since 1st January, 1926; and will he state the total capacity of the closed mills and whether he is prepared to consider legislation prohibiting the import of flour from foreign countries as a remedy?

Mr. W. GRAHAM: I am informed that between 1st January, 1926, and 1st June, 1931, flour mills of an estimated aggregate capacity of 735 sacks per hour have been closed in the United Kingdom. The answer to the last part of the question is in the negative.

Oral Answers to Questions — INCORPORATED COMPANIES.

Mr. WHITE: 72.
asked the President of the Board of Trade how many companies were floated in 1927, 1928 and 1929 respectively;. how many of these companies have been subsequently wound up; and how many of those which have been wound up enjoyed the benefit of safeguarding or other protective duties?

Mr. W. GRAHAM: The companies incorporated under the Companies Acts in the years named in the first part of the question numbered 8,850, 9,522 and 9,099 respectively. The information asked for in the second and third parts of the question is not available.

Oral Answers to Questions — ROMAN BATHS, WALL, SOUTH STAFFORDSHIRE.

Mr. MANDER: 73.
asked the First Commissioner of Works if he is aware of the work being carried out at Wall, in South Staffordshire, in the protection of the Roman baths by roofing; and whether he is prepared to consider the adoption of similar methods elsewhere so that Roman cities may be made available in a permanent condition for the inspection of the public?

The FIRST COMMISSIONER of WORKS (Mr. Lansbury): My Department is aware of the work at Wall, and
of the method of protection adopted. This method would be used where it was suitable.

Mr. MANDER: Will the right hon. Gentleman consider the possibility of making a tour during the Recess, and possibly pay a visit to these baths himself?

Mr. LANSBURY: Life is too short.

Captain CROOKSHANK: Will the right hon. Gentleman consider affording similar protection in the case of any interesting Portuguese remains in Wolverhampton?

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

Captain CROOKSHANK: 75.
asked the Minister of Pensions if he is aware that the pension awarded in respect of her son to Mrs. E. Maw, of East Stockwith, Gainsborough, has been reduced from 5s. to 4s. 2d., on the grounds of an error in calculating the award; if he will state how long the pension had been paid at the rate of 5s. before the discovery of the alleged error; what is the error; and whether he is prepared to reconsider the whole question in view of Mrs. Maw's present condition?

The MINISTER of PENSIONS (Mr. F. O. Roberts): The original award under Article 21 (1) (c) of the Royal Warrant was not an error of calculation, but was made on the strength of erroneous information as to the deceased son's age on enlistment, which had subsequently to be corrected. The amended award represents the maximum to which the widow is entitled under Article 21 (1) (a) of the Warrant on the ground of her partial dependence on the deceased son. The case has been fully considered, but the circumstances do not admit of a higher grant.

Captain CROOKSHANK: Will the right hon. Gentleman answer my question as to how long has this pension been paid in error?

Mr. ROBERTS: I am afraid I have not that information at hand, but I will see that the hon. and gallant Member has it.

Captain CROOKSHANK: May I enter a protest, because this is what I asked
for in the second part of my question, and the Minister has not taken the trouble to reply?

Mr. R. A. TAYLOR: 76.
asked the Minister of Pensions whether pensions payable to British ex-service men now resident in Australia are paid in Australian currency; and whether the pensioners concerned receive the Australian equivalent of the exchange value of the £ sterling?

Mr. F. O. ROBERTS: Pensions granted under the Royal Warrants are paid in Australian currency to ex-service men whilst residing in that Dominion. In view, however, of the present abnormal position of the exchanges, arrangements are in process of agreement with the Commonwealth Government whereby the pensioners will, until normality returns, receive supplementary payments in respect of the difference of exchange.

Oral Answers to Questions — SCOTLAND.

REGISTRY OF SASINES (CLERKS).

Mr. MATHERS: 77.
asked the Secretary of State for Scotland when a settlement will be reached regarding the claims of the second class clerks of the department of the registers and records of Scotland, which have been under consideration since August, 1929?

Mr. WILLIAM ADAMSON: As I stated in reply to a question by the hon. Member for North Edinburgh (Sir P. Ford) on 21st July, I shall do everything possible to expedite publication of the second Fleming Report. When the report is received, no time will be lost in dealing with outstanding questions of staff organisation (including the claims of the second class clerks) in the light of the Committee's recommendations.

Mr. MATHERS: Is the right hon. Gentleman not aware even now that the report with regard to reorganisation has little or nothing to do with the claims put before him in August, 1929, with regard to the remuneration of these clerks based on the high quality of their work?

AGRICULTURAL, CREDITS.

Lieut.-Colonel MOORE: 78.
asked the Secretary of State for Scotland what is the present position of the Agricultural
Credits Corporation; and when it will be possible for Scottish farmers to obtain loans under the Act?

Mr. W. ADAMSON: As stated in my replies of the 23rd and 28th instant to questions on this subject, the Memorandum and Articles of Association of the Agricultural Security Corporation have been approved by the Department of Agriculture for Scotland, and the further stages in the formation of the Corporation are being carried out, but I am not yet in a position to say when the Corporation will be ready to commence operations.

Lieut.-Colonel MOORE: Is the right hon. Gentleman aware that the full facts and prospectus have been lodged with the Chancellor of the Exchequer for the last 2½ months, and that no action has apparently been taken and the farmers cannot get loans?

Mr. ADAMSON: I think that the hon. and gallant Member is assuming something that he has no justification for assuming.

Mr. MACPHERSON: Is my right hon. Friend aware that English farmers under a similar Act have been receiving loans for the last two years, while not a single loan has been given under the Agricultural Credits (Scotland) Act within the last two years; and will he now expedite this matter?

Mr. ADAMSON: My right hon. Friend is well aware of the circumstances.

Mr. BOOTHBY: Can the right hon. Gentleman tell us what is now holding up the matter, because the circumstances have changed?

Mr. ADAMSON: If the hon. Member who has just put that supplementary question had been as anxious about this matter when he had the ear of the late Chancellor of the Exchequer, it might have been arranged long ago.

W. THOMAS.

Mr. BUCHANAN: 80.
asked the Secretary of State for Scotland if he is aware that William Thomas has been detained in Perth Criminal Asylum for over 18 months and that he has now been transferred to Gartloch District Asylum; and, seeing that the man is now sane and
capable of being released, will he see that this is now done?

Mr. W. ADAMSON: William Thomas was admitted to the Perth Criminal Lunatic Department on the 30th July, 1930, and transferred to the Glasgow District Asylum, Gartloch, on the 6th June, 1931, his case being a suitable one for treatment in an ordinary asylum. In view of the medical reports which I have received, it would not be desirable to authorise his liberation at the present time, but further medical examination will be made.

Oral Answers to Questions — FORESTRY WORKERS (HOLIDAYS).

Mr. LAWTHER: 81.
asked the hon. Member for Central Leeds, as representing the Ecclesiastical Commissioners, whether the Commissioners intend to give to their workmen on afforestation an annual holiday with pay, similar to that existing for their salaried staff?

Mr. DENMAN (Second Church Estates Commissioner): The matter is being examined, and I will let the hon. Member know the result.

Mr. LAWTHER: Would it not be possible, after examination, to give these workmen the opportunity of a holiday similar to that enjoyed by other members of the staff of the Ecclesiastical Commission?

Mr. DENMAN: I am afraid I cannot foretell the result of the examination.

Mr. BUCHANAN: Can the hon. Gentleman say why there is a differentiation in the treatment with regard to holidays of those engaged in this work as compared with that adopted by other Government Departments?

Mr. DENMAN: In the first place, this is not a Government Department; and, secondly, there is not, as far as I am aware, any differentiation between the practice of the Ecclesiastical Commissioners and that of the Forestry Commission.

Mr. BUCHANAN: Why has the hon. Member not taken the lead in this matter from Members of the Government, who have improved holiday conditions for their employés?

Mr. DENMAN: It is quite possible that the Ecclesiastical Commissioners will themselves take the lead.

Oral Answers to Questions — COAL INDUSTRY.

CO-OPERATIVE PUMPING.

Mr. HERRIOTTS: 82.
asked the Secretary for Mines if he has made further inquiries with regard to the withdrawal of the pumping machinery from the Chilton and Windlestone collieries; and, seeing that valuable seams of coal will be lost in those collieries and also in the Eldon collieries, if he will make an investigation in that area with a view to establishing central pumping machinery, and whether financial assistance will be granted for that purpose?

The SECRETARY for MINES (Mr. Shinwell): I regret that I am not able to add anything to the answers given to my hon. Friend's previous questions on this subject. With regard to the general question of co-operative pumping, and my powers in that direction, I would refer my hon. Friend to the answer I gave last Tuesday to the hon. Member for Leigh (Mr. Tinker).

Mr. HERRIOTTS: Are we to understand that the Secretary for Mines has no power whatever to order the installation of central pumping machinery? Must the initiative always come from the owners?

Mr. SHINWELL: I have power, but only when the owners in the area ask me to exercise it.

Mr. HERRIOTTS: Is the hon. Gentleman aware that, unless he makes some investigation and uses some influence in this matter, the whole of these valuable seams will be lost?

Mr. SHINWELL: I am well aware of the facts, and am concerned about them, but, until the owners take the initiative, I have no power under the Statute to take action.

Mr. R. RICHARDSON: Will the hon. Gentleman take this matter up with the royalty owners, who are losing acres of coal?

Mr. SHINWELL: I have taken it up with the coalowners, who are primarily concerned, and they are not prepared to take the initiative.

Mr. RICHARDSON: The royalty owners have an interest in it.

CANNOCK CHASE (BORING).

Mr. MANDER: 83.
asked the Secretary for Mines if he is aware of the danger
to the use of Cannock Chase as a national park caused by the recent commencement of coal boring on the top of Brindley Heath in the centre of the Chase; and if he is prepared to approach the coalowners with a view to the adoption of an alternative boring?

Mr. SHINWELL: I understand, on inquiry, that the work in question is only of an exploratory nature, and that, as soon as the position of the seams is determined, the boring apparatus will be removed. There does not appear to be any question of permanent damage to the amenities of the Chase, or any other reasonable method of determining the position of the seams at this point.

Mr. MANDER: Is the hon. Gentleman aware of the great importance of this matter to the workers in the Midlands; and will he keep a careful watch over it?

Mr. SHINWELL: I understand that the hon. Member desires that no shafts should be sunk at this point, and that is precisely what I am anxious to ensure.

Oral Answers to Questions — JUDGES AND MAGISTRATES (RETIRING AGE).

Mr. COCKS: 84.
asked the Attorney-General whether there is any retiring age for Judges of the High Court, County Court Judges, or magistrates; and, if not, whether he will take powers to secure the retirement of anyone holding any such position who may be suffering from such infirmities due to advancing years as may affect the efficient performance of his or her duties?

The SOLICITOR-GENERAL (Sir Stafford Cripps): There is no retiring age for Judges of the High Court or for justices of the peace, or for County Court Judges who were appointed before 1919 and did not accept the provisions of the County Court Judges (Retirement, Pensions and Deputies) Act passed in that year. All these Judges and magistrates must be relied upon to resign before infirmity affects the efficient performance of their duties. Other County Court Judges retire between the ages of 72 and 75 under the Act which I have mentioned. The retiring age of Metropolitan stipendiary magistrates is 70, but it is within the discretion of the Secretary of State for Home Affairs to retain any magis-
trate whose services are of exceptional value until he attains the age of 72. There is no intention to take powers as suggested by the hon. Member.

Mr. COCKS: Is the Solicitor-General aware of the very strong feeling that His Majesty's lieges should be protected from the stupidities of doddering old age?

The SOLICITOR-GENERAL: I am not aware of that feeling.

Miss WILKINSON: As the Solicitor-General does not feel able to take powers in this matter, does he not think that a few hints are required?

The SOLICITOR-GENERAL: No.

Mr. LEIF JONES: Will the hon. and learned Gentleman take action to preserve us from the rash experiments of youth?

Oral Answers to Questions — INDIA.

BARRACK DEPARTMENT (FURLOUGH).

Mr. HORE-BELISHA: 85.
asked the Secretary of State for India whether he will look into the regulations in respect of furlough from India and their application to non-commissioner officers of the barrack department of the military engineer services; and whether, seeing that the two branches of military engineer services, namely, the buildings and roads and electrical and mechanical branches, have a leave reserve which permits members to take leave once in every six years, as laid down in regulations for the Army in India, whereas the barrack department leave reserve permits its members to take leave approximately only once in 10 years, he will arrange for the same facilities in respect of furlough to this country to be allowed to members of the barrack department of the military engineer services in India?

The SECRETARY of STATE for INDIA (Mr. Wedgwood Benn): The facts as regards the leave reserve of the barrack department are generally as stated; but when the matter was last considered it was not held necessary to increase the actual leave reserve, as adequate arrangements could be made to ease the situation by the loan of men from regimental units when necessary.

ROUND TABLE CONFERENCE (MR. GANDHI).

Mr. HACKING: 86.
asked the Secretary of State for India whether he has any information which he can give to the House regarding the invitation to Mr. Gandhi to the Round Table Conference?

Mr. BENN: Mr. Gandhi has not yet definitely signified his acceptance of the invitation to attend the meeting of the Federal Structure Committee which will be held in September.

Mr. HACKING: If Mr. Gandhi does come to England, will the right hon. Gentleman take him for a personal tour of the cotton districts of Lancashire?

DISTURBANCES (DEATHS).

Mr. C. WILLIAMS: 87.
asked the Secretary of State for India the total number of deaths in India due to disturbances in 1928, 1929, 1930, and to the last convenient date in 1931?

Mr. BENN: I regret that I have not yet received the Government of India's reply to my inquiry regarding these statistics, the compilation of which, as I have already stated, entails considerable labour.

Mr. WILLIAMS: As I began asking these questions in April, cannot the Government give us any figures?

Mr. BENN: The hon. Member asked for an elaborate statistical table, and I wrote to India asking whether it could be compiled. I have not yet had an answer. When the answer is received, I will communicate it to the hon. Member.

Mr. WILLIAMS: I did not ask for an elaborate table, but only for the total figures, of which, surely, the right hon. Gentleman most have some idea.

Oral Answers to Questions — CONVICTION AND SENTENCE, NUNEATON.

Mr. ERNEST WINTERTON: 13.
asked the Home Secretary whether his attention has been called to the case of William Arthur Hudson, who, on 20th July, was sentenced at Nuneaton Police Court to 28 days' hard labour for stealing a reading glass value sixpence; whether there were other charges or previous convictions against the prisoner; and whether he will review this case with a view to the reduction of the sentence?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Short): Hudson had attracted attention by his suspicious movements at various shops, and was seen to take the reading glass and place it in his pocket with other articles which he had purchased. He has seven previous convictions of which two were for theft, and on another occasion a charge of theft was dealt with under the Probation of Offenders Act. In the present case he pleaded guilty, and my right hon. Friend regrets he can find no ground for advising any remission of the sentence passed on him.

Mr. WINTERTON: Has not this man expiated his previous offences by the sentences previously passed without being sentenced to a month for stealing 6d.?

Mr. SHORT: My hon. Friend will take notice that this man pleaded guilty.

Mr. WINTERTON: Is the hon. Gentleman aware that the man, although pleading guilty, said he would appeal against the severity of the sentence?

Mr. COCKS: How old was the magistrate in this case?

Oral Answers to Questions — FINANCIAL COMMITMENTS.

Mr. BOOTHBY: 47.
(for Mr. BRACKEN) asked the Prime Minister whether His Majesty's Government will give an undertaking that they will enter into no financial commitments to foreign States or international organisations during the forthcoming Recess without summoning a special Session of Parliament to consider the advisability of such commitment?

The PRIME MINISTER: The hon. Member may be assured that in any business that may arise, the Government will take such course as is constitutionally proper.

Oral Answers to Questions — RUSSIA (COMPULSORY LABOUR).

Major-General Sir ALFRED KNOX: 88.
asked the Secretary of State for Foreign Affairs whether his attention has been drawn to a petition addressed to the Secretary-General of the League of Nations by Russian refugee organisations throughout the world asking for an inquiry into the question of compulsory
labour in Soviet Russia; and whether he will support this petition?

Mr. CHARLES EDWARDS (Lord of the Treasury): My right hon. Friend has seen a reference in the Press to a letter addressed to the Secretary-General on this subject. As regards the second part of the question, the House is already aware that, in the opinion of my right hon. Friend, it is undesirable that the League of Nations should be associated with any inquiry such as that suggested in the territory of a non-member State, except at the request of that State.

Oral Answers to Questions — ROYAL NAVY (CADET ENTRY).

Captain HALL: 89.
asked the First Lord of the Admiralty if he can give the number of cadets for the executive and engineering branches to be entered for Dartmouth and from public schools, and the number of lower deck ratings in these branches to be promoted to commissioned rank during the present year?

The CIVIL LORD of the ADMIRALTY (Mr. G. H. Hall): The figures are as follow:

Cadets:



Dartmouth Entries, 1931
97


Special Entry—Executive
12


Special Entry—Engineering
22


Entry from Mercantile Marine Establishments.—Executive
4


Entry from Mercantile Marine Establishments.— Engineering
3


Ex-Lower Deck:



Promotions to Mate
Uncertain (the number selected has recently averaged 6).


Promotions to Mate (E)
4


Promotions to Midshipman (E)
1

Captain HALL: 90.
asked the First Lord of the Admiralty if the Admiralty has yet received the report on the systems of cadet entry; what action has been taken; and when an announcement of the decisions of the Board is likely to be made?

Mr. G. H. HALL: The answer to the first part is in the affirmative; to the second part that the recommendations made are being examined; and to the third part that owing to the variety of questions involved it is not possible to
say when an announcement can be made. My hon. and gallant Friend may rest assured that every effort is being made to expedite completion of the necessary investigations.

Captain HALL: Will the hon. Gentleman make representations to the First Lord of the Admiralty to expedite the report as the men on the lower deck are eagerly looking forward to the promulgation of this scheme announced as the result of the Larken Committee and any new scheme for entry from other sources.

Mr. G. H. HALL: My right hon. Friend is well aware of that.

BUSINESS OF THE HOUSE.

Ordered,
That no Questions be taken to-morrow after Twelve of the clock; that to-morrow Government business be not interrupted at Four or half-past Four of the clock; and that Mr. Speaker shall not adjourn the House until he shall have reported the Royal Assent to the Acts which shall have been agreed upon by both Houses; but that, subject to this condition, Mr. Speaker at Five of the clock shall adjourn the House without Question put."—[The Prime Minister.]

CONSUMERS' COUNCIL BILL.

Reported, with Amendments, from Standing Committee C.

Report to lie upon the Table, and to be printed.

Minutes of Proceedings to be printed.

Bill, as amended to (in the Standing Committee), to be considered upon Tuesday, 20th October, and to be printed. [Bill 222.]

MESSAGE FROM THE LORDS.

That they have agreed to—

Perth Corporation Order Confirmation Bill,

Ministry of Health Provisional Order (Great Marlow Water) Bill,

Ministry of Health Provisional Order (Yeadon Water) Bill, without Amendment.

Amendment to—

Bethlem Hospital (Amendment) Bill [Lords],

Ministry of Health Provisional Order Confirmation (Lancaster and District Joint Hospital District) Bill [Lords], without Amendment.

Amendments to—

Local Government (Clerks) Bill [Lords],

Corby (Northants) and District Water Bill [Lords],

Scarborough Corporation Bill [Lords], without Amendment.

LONDON PASSENGER TRANSPORT BILL.

Reported, with Amendments, from the Joint Committee.

Report to lie upon the Table, and to be printed.

Bill, as amended, re-committed to a Committee of the Whole House for Tuesday, 20th October, and to be printed. [Bill 223.]

Orders of the Day — CONSOLIDATED FUND (APPROPRIATION) BILL.

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

Mr. SMITHERS: On a point of Order. Before the Debate commences, may I draw attention to the very grave disability under which the House is to-day, because the report of Sir George May's committee is not in the hands of Members.

Mr. SPEAKER: No point of Order can arise.

Mr. SMITHERS: I want to raise a protest that it should be in the hands of some newspapers before it is in the hands of Members of Parliament.

Mr. SPEAKER: There is no point of Order.

Mr. SMITHERS: I want to suggest that the Government deliberately—

Mr. SPEAKER: No point of Order arises.

FINANCIAL POSITION.

Mr. CHAMBERLAIN: The Motion for the Second Reading of the Appropriation Bill has frequently been the occasion for discussions ranging over a wide geographical field. We had hoped it might have been possible at this time, when the House is about to disperse for a protracted period, to have some discussion upon the grave international matters which have occupied the attention of Ministers during the last few weeks. But, when the Chancellor of the Exchquer stated yesterday, in answer to a question by my right hon. Friend, that he could not usefully make any statement upon that subject at that time, my right hon. Friend did not press his question, because, of course, he recognised that an issue of this magnitude cannot be forced and that to attempt to probe too deeply into questions of such delicacy before they are ripe for publicity might do more harm than good. At the same time, I express the hope that, now that the Prime Minister has
returned from his Continental journey, he may even yet, before the House separates, find some opportunity of giving us a little information as to the progress of the conversations which have been taking place and as to the prospect of a happy result of those conversations and a happy issue from a problem in which, necessarily, we in this country are very deeply interested.
In the meantime, however, I think that it will not be amiss if, on this occasion, I take the opportunity of making some brief examination of the general financial position in this country, and if I ask the Chancellor, in his turn, to give us some indication of what his attitude is towards what, I think, is generally recognised as a position of some seriousness and gravity. It is now some three months since the Chancellor opened his Budget. At that time I expressed, and on more than one occasion since I have expressed, the view that that Budget was, upon its financial side, open to very serious criticism, but, owing to the fact that it contained some novel and highly controversial proposals in regard to the taxation of land values, I do not think that as much attention has been given to that side of the Budget as it was entitled to and as it ought to receive. I do not accuse the Chancellor of having deliberately emitted a smoke screen in order to conceal the essential unsoundness of his Budget, because I know that the question of land value taxation is one which has long been a cherished hobby of his, and we all know that he clings very tenaciously to his hobbies. But that has, in fact, been the effect of those proposals, and I take it up again now, because I think that various things which have happened since the Budget was first introduced have gone far to confirm and to strengthen the views which I expressed at the time when it was introduced.
May I shortly recapitulate some of the criticisms which I thought it necessary to make. Of course, the most important is that which concerns the relations between the Exchequer and the Unemployment Insurance Fund. I pointed out more than once that, as it seemed to me, the Chancellor was really faced with this dilemma, that either he must go on permitting the borrowing from the Exchequer by the Unemployment Insurance Fund of such large sums that it was difficult to
contemplate that they could ever be recovered from the Fund with all the implications that course brings with it, or else he must contemplate the provision for those persons who might be thrown out of insurance of considerable sums from the Exchequer which were not provided for in his Budget. We all know that the Chancellor has, in fact, adopted the first of those two courses, but, in doing so, he has only postponed the inevitable reckoning which must come sooner or later, and which the longer it is delayed the more serious it will be. The Chancellor showed a deficit of £37,500,000, and out of that £37,500,000, no less than £30,000,000 has been taken from sources which cannot be tapped a second time. There is the £20,000,000 from the Dollar Exchange Fund, and there is the £10,000,000, which is obtained by anticipating certain parts of the Income Tax, but the £30,000,000 of expenditure which those items are intended to meet has not been stopped. That is going on and, therefore, we have to face the fact that in another year that £30,000,000 must be provided from some new sources, because the sources from which it was made this year will not again be available.
The third point to which I directed his attention was what seemed to be the sanguine nature of the estimates which the Chancellor made of the revenue he expected in the current year. Will anybody in this House to-day, after the events of the last few months, say that I was wrong in expressing that view? We have now been able to see the actual revenue returns for the first three months in the year. Let me just bring the attention of the House to one or two points to be examined in those returns. Take, first of all, the Income Tax. The Chancellor estimated that there would be a deficiency as compared with last year of about £8,000,000 in receipts from Income Tax. The returns in the first quarter show that Income Tax is down as compared with the corresponding quarter of last year by some £2,250,000. At first sight and on a superficial view that might seem to indicate that the total deficiency to be anticipated at the end of the year was not greatly in excess of that which the Chancellor had estimated, but hon. Members generally are quite aware of the fact that the bulk of the Income
Tax comes in the last quarter of the year. When you observe that the total amount of the Income Tax which actually came in during the first quarter is only £20,000,000, or about one-twelfth of the total amount estimated to be received from Income Tax during the year, you will see that the deficiency, already amounting to £2,250,000, bids fair, if that proportion is maintained, to be something very much more substantial than that which the Chancellor allowed.
What is the next large item of revenue? It is Customs and Excise. There the Chancellor estimated a deficiency, as compared with last year, of about £7,500,000. There, again, the returns for the first quarter show a diminution of £2,250,000, and we cannot, therefore, hope that we are going to escape probably a larger deficiency on the items of Customs and Excise than that estimated for by the Chancellor. The Estate Duties were expected to produce a considerably larger sum than last year. The increase budgeted by the Chancellor was £7,000,000 in the year, but the first quarter showed, not an increase in the yield of the Estate Duties, but a decrease of £3,250,000, and I de not know any reason that should lead us to suppose that the decrease which has shown itself in the first quarter of the year is going to be counterbalanced by a considerable increase in later quarters of the year.
Finally, if we allude to the Stamp Duties, which were estimated to give an increase of revenue of three and a third million pounds, in the first quarter of the year they showed an actual diminution of £1,300,000. Altogether, taking the whole of the returns for this quarter, there is a drop of some £7,000,000 as compared with last year. That figure alone, I venture to think, justifies the view which I expressed when the Chancellor first opened his Budget, that he was unduly sanguine in his estimates of the revenue to be expected this year.
4.0 p.m.
Let us look for a moment on the other side of the account. It will be remembered that the Chancellor of the Exchequer made no allowance in his Budget for any Supplementary Estimates. He budgeted for a nominal surplus of £134,000. I said at the time that all our past history showed that that was nothing but a gamble, and as far as we have gone that statement has been justi-
fied up to the hilt. Already we have had Supplementary Estimates presented to the House amounting to £812,000. We have an increase in the amount which is to be devoted to transitional benefit at the cost of the Exchequer amounting to £5,000,000, and there is the liability which the Government have estimated in connection with the Hoover proposals amounting to another £11,000,000. Therefore, instead of a nominal surplus of £134,000 at the end of the year, we have already got to expect that there will be a substantial deficiency. Our anxieties do not stop there. What is going to happen in the financial year after this? My hon. Friend behind me has endeavoured to make a protest against the delay in the publication of the Economy Committee's Report, but if one is to believe the sort of rumours or the sort of anticipations—intelligent anticipations, it may be—of what is in that report, there is expected to be a deficiency in the following year of some very alarming proportions. I am not going to make any estimate myself of what may happen in that year, but I would like to recall to the recollection of the House what the Chancellor of the Exchequer himself said on the Subject when opening his Budget on 27th April last. He said:
I do not for one moment conceal my opinion that the position continues to be grave, and that the finances of next year may present difficult problems. Indeed, if the world depression fails meanwhile to lift, reduction of expenditure will be the only alternative to increased taxation. For these reasons, it will be for the House to take carefully into account the proposals that may emerge from the work both of the Economy Committee and the Unemployment Commission."—[OFFICIAL REPORT, 27th April, 1931; col. 1408–9, Vol. 251.]
I would like, in passing, to make a protest with all my might against that expression used by the Chancellor:
if the world depression fails meanwhile to lift.
I do protest at the implication which appears to be conveyed by those words that this great country, as rich to-day as it ever was in enterprise, in skill, in courage and in natural resources, can do nothing but drift helplessly before the storm. I believe that we can do a great deal to help ourselves, provided two things are present, first, that our people
have given them a fair chance; and, secondly, that they have that confidence in the Government of their country without which no industry can hope to prosper.
I was looking the other day at some interesting figures published in the Board of Trade Journal for last week and, although they are not agreeable reading, nevertheless I think they contain a lesson for us. There is a comparison of imports and exports of the principal industrial groups for the first six months of 1931 as compared with the corresponding period in 1924. I say that they are not very agreeable reading because in these cases—I have 14 groups in front of me—the figures range from an increase in imports of 21 per cent. and a decrease in exports of 47 per cent. in the case of iron and steel manufactures, and to an increase in imports of 151 per cent. and a decrease in exports of 1 per cent. in electrical goods. But there are two groups of industries in those 14 which show rather a different position. The first one is silk and silk manufactures—a partly protected industry—and in that case the exports show a decrease of only 5 per cent., whereas the imports, instead of showing a great increase, show an actual decrease of 16 per cent. To give an even more striking example in a group, namely, vehicles, which includes motor cars, the imports show a decrease of 68 per cent. and the exports an increase of 73 per cent. I will not say more about that than that those figures, and especially the figures of those two groups compared with the disastrous results in other groups, do justify my contention that, given a fair chance, our manufacturers are able to hold their own with the world.

Mr. BENSON: Can the right hon. Gentleman also give us the figures of the other safeguarded industries?

Mr. CHAMBERLAIN: No, Sir. The hon. Member can, no doubt, get the figures from the Board of Trade Journal. But I will say this, that although the figures may not be so large in the case of other safeguarded industries, I do know that, taking the figures of the safeguarded industries and comparing them with the figures of the non-safeguarded industries, as a whole, there is a striking difference in favour of the safeguarded industries.
I return to the Chancellor's words, which I quoted just now. The House will see that he presented us with three- different alternatives. The first was a return to prosperity, whether due to the lifting of world depression or due to our own efforts; the second was increased taxation; and the third, reduction of national expenditure. I am not one of those who believe that the prosperity of this country has gone for ever. I believe, indeed, that the time at which prosperity returns, and the extent to which it returns, may depend very largely upon ourselves, and especially do I believe that these things will depend very much upon how far we can induce the other parts of the Empire to join with us in a close combination in trading. But, even on the most optimistic estimate, that return to prosperity will take time, and the situation is urgent and critical. We cannot wait, and, therefore, for an immediate remedy for the evils which we see in front of us, we cannot, obviously, depend upon the return of trade prosperity.
Let me come, then, to the next alternative of the Chancellor—the question of taxation. Would anybody suggest for one moment that it is practicable now to make some further increase in taxation with its consequent burden upon industry? I received a little while ago a communication from the National Council of Industry and Commerce, in which, in an interesting analysis, they indicate their view that, during the last 12 years, an average of upwards of £139,000,000 has been taken every year from industry by taxation. The Chancellor of the Exchequer himself has recently informed us that the taxation for the year 1930–31 amounted per head of the population to £16 6s. 5d., which, I believe, is actually 10s. more than it was in the preceding year. I think it is clear to every Member of the House that additional taxation is not a source to which one can turn for the solution of our difficulties.
Then we are left with the Chancellor's third alternative—the reduction of national expenditure. Economy is never a popular matter, whether it be economy for the individual or economy for the State. Nobody likes the idea of having to give up luxuries or pleasures to which he has grown accustomed, but, in national economy, I believe that the real grievance arises not so much from actual hard-
ships which may be suffered by a man who is called upon to reduce his standard of living, as from a sense of injustice in the belief that he is being asked to make larger sacrifices than he ought, or that somebody is being let off lighter than he ought to be. Those beliefs on the part of an individual or a section of the community may be totally unfounded, but they are natural, because the wish is father to the thought in this case, and, moreover, they are views which are frequently fed and fostered by people whose motives are by no means only sympathy for the unfortunate victims.
But, great as are the difficulties in the way of Governments trying to bring about reductions of national expenditure, yet those are difficulties which, in great crises, can and must be overcome, and I go further and say, they are being overcome by other Governments. Look at the position in Germany. Germany, like this country, has been overspending in the last few years. Now she has come up against the position when she realises that it is necessary to pull in, and she is making tremendous sacrifices to-day. Great cuts are being made in the income and earnings of all sections. In Australia, a similar process is going on. I find that the actual reduction of expenditure which is being contemplated by the Federal Government of Australia, leaving out of account the wage cuts which have been necessitated by the Federal Wages Board, and leaving out of account the reduction of interest which is being taken by the holders of fixed interest-bearing securities, there remain reductions in national expenditure which, if you translate them into the proportionate amount in this country, would represent a reduction in our Budget of something like £110,000,000 a year.
What the people of Germany are prepared to face, and what the people of Australia are facing, I am convinced that the people of this country are ready to face, if they are convinced that it is necessary. The time has come when it is necessary that people should be told the truth. We read to-day of company directors being prosecuted because it is alleged that they have not given sufficient information to their shareholders. I ask, is it not equally important that the people of this country should have sufficient information to enable them to
judge the true position of the national finances, to enable them to see where they stand, and to enable them to insist upon the requisite action being taken?
The people of this country have got to realise that foreign confidence in the credit of this country has been shaken, because they have watched the expenditure of this country growing faster than its income, and the restoration of that confidence can only be brought about when the foreigner is convinced, first, that the people of this country realise the situation, and, secondly, that they are going to have the courage to take the necessary steps to deal with it. At bottom, I believe there is no foundation whatever for this want of confidence in British stability. I would like to remind hon. Members of a very interesting passage in the report recently issued by the Macmillan Committee. After giving a summary of the foreign liquid resources in London and the British acceptances on foreign account for the last five years, they say that the net liability of London has diminished from £279,000,000 to £254,000,000. They describe those figures as somewhat unexpected and as reassuring, and they conclude the chapter on the gold standard in these words:
The underlying financial facts are more favourable than had been supposed, and that Great Britain's position as a creditor country remains immensely strong.
I believe that that statement represents nothing but the truth. I would like to quote further words which seem apposite to the present situation, because they describe very tersely the immense advantage which has brought the City of London to its present powerful and influential position in the world. They say:
The City of London can still claim to be the most highly organised international market for money in the world. Its freedom and elasticity are without parallel. Its accepting houses and its discount market provide unequalled facilities for the financing of national and international commerce; whilst the former, in their capacity as issuing houses, play a large part in the placing of international issues of a long-term character. Lastly, the great British joint stock banks have the pre-eminent merit that their financial strength and liquidity are beyond any question. It may be that we are too far removed in this country from the days of great banking failures and panics, and the ruin following from the
destruction of confidence, to esteem at its proper worth the enormous value of an impregnable banking system.
Those are indeed mighty sources of strength, but let us not forget that the strongest system that ever was invented or ever has existed in the world could not withstand indefinitely a process where its national expenditure is in excess of its national income. If when the report of the Economy Committee is published, it gives the public an unpleasant shock, it may perhaps prove to be a salutary tonic if it stimulates them to realise the true situation and to take the necessary steps to put their house in order.
I have finished what I wanted to say. I have endeavoured very carefully to abstain from anything in the nature of recrimination, because I feel that a time like this, when the eyes of others are upon us, watching to see if there is not some fatal flaw in the structure of this old tower, which has withstood so many storms and earthquakes, is not the time to emphasise party differences, but rather the time to make an appeal for appropriate action on the part of the Government, and for a consideration of the situation, with all that seriousness and care which it demands. I have expressed my belief in the essential soundness and strength of our financial system. I recall those well-known lines:
Nought shall make us rue,
If England to itself do rest but true.
To be true to England is not to shut one's eyes to unpleasant facts, not to sit still and see whether the world depression will pass away. It is a time now for vigorous and courageous action. I recognise that I cannot ask the Chancellor of the Exchequer this afternoon to commit himself to any specific economies. It would not be reasonable to make any such request, but I do ask him, as the guardian for the time being of the national finances, to give us some assurance that he realises the seriousness of the situation, that he realises the urgent need for a reduction of national expenditure and that he will devote the weeks during which this House will be dispersed, to a thorough, an exhaustive and a determined examination of the steps that may be necessary to put matters right.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): I am much obliged to the right hon. Gentleman for taking advantage of this occasion to call the attention of the House to the national financial situation. I am especially grateful to him for the restraint which he has shown in dealing with the matter. This is a time when a lightly spoken word or even a wrongly turned sentence might have the most serious consequences. It is especially necessary at this time to be cautious, because of the international situation, a situation in which some of the Continental countries are very deeply involved. I am grateful to the right hon. Gentleman, because he has responded to the appeal that I have made that it would probably be unfortunate in the interests of the negotiations which are still going on if any public debate took place at the present time. Investors, as we all know, are naturally nervous people and the slightest suspicion of the insecurity of their investments is apt to lead them to adopt courses which are not justified by the actual facts.
The position of Great Britain in this respect is always peculiarly vulnerable, because we are the great money market of the world, and it is therefore always essential that confidence throughout the world should rely on the strength of the London money market. Foreign credits are held in London to the extent of probably hundreds of millions of money, and the recent incidents abroad have shown what consequences may arise from even an unfounded rumour. It is known, of course, that London has heavy foreign credits and commitments. In view of the present financial position of other countries, in which it is known that the London market is to some extent involved, there naturally is a possibility, to put it no higher, of a hesitation in regard to our position. Therefore, I feel extremely grateful to the right hon. Gentleman for the testimony which he has paid to the fundamental soundness of the financial position of London and of the country generally.
After these introductory observations, may I turn to some of the points raised by the right hon. Gentleman in his speech? He began by a criticism of the
Budget which I introduced three months ago, and said that it was unsound in many of its proposals. He referred first to the question of unemployment insurance. We have had many Debates on that subject within the last few months. It now appears to be accepted by the Opposition that the borrowings in connection with the Unemployment Insurance Fund should be regarded as analogous to the borrowing that took place for the conduct of the War. I do not accept that argument or that contention. It may be that there are doubts whether the Insurance Fund will ever attain once more to a condition of prosperity which will enable the money borrowed to be repaid, but I do not think we are at all justified at the moment in regarding that as being a national burden or a national debt at all comparable with the War Debt. I have in this House on many occasions expressed my opinion that if the position of the country was such that the unemployed could be provided for out of current revenue, that would be a much sounder course to pursue, but I am inclined to think that even hon. Members opposite would hesitate to approve of such an increase in taxation as would be necessary if the unemployed were to be provided for wholly out of current revenue.
The second criticism of the Budget was in regard to the way in which I had obviated the need for increased taxation by appropriating sources of revenue for the current year which will not be available next year. I explained, when I put that proposal before the House as an alternative to increased taxation, that those sums would not be available next year and that possibly if there was no very considerable improvement in the industrial situation, recourse to increased taxation would be necessary next year, unless we could adopt economies which would obviate that necessity. I think I also warned the House that the Budget situation next year in the event of neither of those two things happening, would be of a very serious nature indeed. I do not in the least complain of what the right hon. Gentleman said in regard to that point. It is true that I expressed a hope that there would be a considerable improvement in trade such as would modify the Budget position, but I went no further than to express the
hope. Unfortunately, so far the hope has not been realised, and I tell the House quite frankly that the outlook for the Budget of next year, unless very considerable economies can be effected, is a very serious prospect indeed.
The right hon. Gentleman pointed out quite rightly that since the Budget was presented the House of Commons has committed itself to a very considerably increased expenditure amounting to £7,000,000 or £8,000,000 and that no provision was made in the Budget for supplementary expenditure of that character. As a result of the Hoover proposals or rather as a result of the acceptance of the Hoover proposals there is an additional burden this year of something like £11,000,000. From these figures the House will realise that the outlook for the Budget of next year is very serious indeed and it is a position to which the Government will have to face up, and a position which the House of Commons itself and the country will have to face. The right hon. Gentleman referred to my estimates of revenue for the current year as being on the sanguine side. Apart from one figure of estimated revenue, and that is the Stamp Duty, I think that at the time, and in view of the outlook at the time it was made, I was justified in all the items of revenue which I put before the House in my Budget Speech. I do confess that in regard to the Stamp Duty—I do not think I used the word which the right hon. Gentleman attributed to me, a gamble—

Mr. CHAMBERLAIN: I did not attribute it to the right hon. Gentleman.

Mr. SNOWDEN: But in regard to the Stamp Duty I do confess I formed that estimate in the expectation that after two or three years of depression on the Stock Exchange there would be some revival, but no one knows better than the right hon. Gentleman that we cannot estimate the revenue of the year on the figures of the first quarter of the year and the reference he made by way of comparison to the yield of Income Tax during the first quarter and the expected yield over the whole year is wholly irrelevant and has no bearing on the situation. It is true as regards Customs and Excise that so far the revenue has not come up to expectations. The industrial situation has
something to do with that. As a matter of fact the trade position does particularly affect the Customs and Excise revenue. Further, although I did not base my estimates upon any considerable revival of trade, I did not anticipate that trade depression would deepen and that there would be three or four months after the beginning of the present financial year little prospect or any likelihood of the depression lightening. The right hon. Gentleman then turned to the question of expenditure but I will delay dealing with that point until I have touched upon one or two other matters arising out of his speech.
The budgetary position in this country is by no means exceptional, indeed I believe it is the fact that with perhaps the exception of one country our budgetary position is more satisfactory than of any other country in the world. The United States of America has just closed its financial year with a deficit of £200,000,000, one thousand million dollars, and the Canadian Budget, which was presented a month or two ago, shows a deficit which on the proportion of their Budget to our own would represent a deficit in this country of something like £60,000,000. New Zealand, which has hitherto been one of the most prosperous of our Dominions, recently closed its financial year with a position very similar to that of Canada. I mention these matters because they are apt to be forgotten. There seems to be an impression abroad that the budgetary position of this country—it seems to be rather prevalent—is in a condition of bankruptcy. Nothing could be farther from the truth than that. It must be remembered too what financial burdens this country has to carry, far more than any other country. We largely financed the War, we kept our Allies in the field and we provided them with money, and then after the War, in a fit of quixotic generosity, we forgave them from four-fifths to two-thirds of the debt which we had incurred in helping them to continue the prosecution of the War.
It is of course absolutely essential for the maintenance of the credit of this country that there should be a balanced Budget. It may be difficult to balance it. After my experience I am rather chary of making definite pledges, and therefore I will not go beyond saying
this: that I shall make every possible effort to balance next year's Budget, although it may involve rather disagreeable consequences to certain classes and to certain people, but the necessity of doing that is so important and so urgent that as far as I am concerned it will have to be undertaken. The consequences of an unbalanced Budget are serious, not only upon foreign opinion but very serious to the credit of our own country and to our own industries. The bank rate to-day has gone up by another 1 per cent. That is an increase of 2 per cent. within a week. It affects us in a great many ways. It affects me peculiarly seriously. I made an estimate of the cost of Treasury bills this year and up to the present time the cost of those bills has been considerably below that estimate. Therefore a very large saving has been made under that head during the first three or four months of the present financial year. Unfortunately, the increase in the bank rate has raised the cost of Treasury bills above my estimate and therefore that may be another item in the Budget estimate which will justify the right hon. Gentleman nine months hence in criticising the soundness of the Budget estimates I made. This of course has a bad effect on industry and a very threatening effect on prices, upon wages and upon employment. It is not due to anything in our own financial system that these increases in the bank rate have been necessitated but owing to the unparalleled withdrawal of gold which has taken place in the last two or three weeks.
The right hon. Gentleman said that there were three ways of balancing the Budget, or rather three courses which might be adopted. The first course was to encourage trade and consequently increase revenue from taxation. Secondly, that we should do it by increased taxation—but that course the right hon. Gentleman deprecated. I was rather surprised to hear him say that, because I thought it was the main plank in the programme of the party opposite to increase taxation. We have been told by the right hon. Gentleman many times that he has ready an emergency general tariff. I hope he does not think—he will pardon the word—that he can fool this country into the belief that taxes which
are levied upon articles which they consume are not just as much taxation as taxation which is directly levied.

Mr. SPEAKER: I must remind the right hon. Gentleman that on the Appropriation Bill we may discuss the financial position of the country, but we cannot enter into questions of taxation.

Mr. SNOWDEN: I am of course aware of that, but I was only replying to the point made by the right hon. Gentleman.

Mr. SPEAKER: I think the right hon. Gentleman is getting much beyond the point put by the right hon. Member for Edgbaston.

Mr. SNOWDEN: Perhaps I was not quite so clever as the right hon. Gentleman in insinuating rather than in stating. There are only two ways in which we can deal with the present situation, and one is to increase taxation: the other is by a reduction of expenditure. As I am not allowed to deal with the matter of increased taxation, I must confine myself to reduction in expenditure. The House will remember the Debate on this subject in February of this year. The outcome of that Debate was the passing of a Resolution calling for the setting up of a committee to inquire into the possibility of reducing expenditure. That committee, as the House knows, has just reported. The report is not yet in the hands of hon. Members, but I hope it will be by to-morrow. That Resolution for the setting up of that committee was a Resolution supported by all parties in this House, and therefore the House of Commons has a special responsibility for dealing with the report of the committee. No Government, and especially a Government like ours, which does not command a majority in the House of Commons—[Interruption]—of its own party, could take the full responsibility for submitting to the House of Commons proposals for a reduction of expenditure of a drastic character.
The right hon. Gentleman said quite frankly that while economy in the abstract is always popular, specific proposals for economy are always opposed by either sections or by the House of Commons as a whole. We have had a recent experience of that. The Government are taking the report into very serious consideration, and they will be prepared to submit to the House of Com-
mons, when it reassembles in October, the result of their consideration and de-liberations. As I have said, the responsibility for carrying out any recommendations that will be made must be shared by the House of Commons as a whole. The right hon. Gentleman said that he would not expect me this afternoon to go further than I have just gone. As hon. Members will see to-morrow, the report of the committee is very voluminous; it occupies something like 300 pages, and it will require long consideration; and I assure the House once more that that full consideration will be given to it.
I think I have dealt with most of the matters that were raised by the right hon. Gentleman. I notice that when reference was made to expenditure my hon. Friends behind me interjected remarks about our War Debt. This, of course, is the greatest of all the burdens upon the national finances. I have carried through a number of comparatively small conversion operations which have effected some saving, and perhaps I should not be indiscreet if I say—I hope that no serious consequences will result from my confession—that I have prepared a scheme for a huge conversion of the War Loan, by which a very large saving in interest on the debt will be effected. Had it not been for recent financial developments that conversion operation would have been floated before now. I am very anxious therefore, on that account alone, to see the position recover, and at the first favourable opportunity that conversion operation will be launched.
As I said just now, if it is a success, as I believe it will be, if launched in favourable circumstances, it will effect such a saving in our national expenditure as will go no mean way towards meeting the inevitable need for economy in next year's Budget. But I want to conclude by associating myself with what the right hon. Gentleman said, or rather repeating my association with the words of the right hon. Gentleman in regard to the soundness of our national position. I say this mainly to be heard, as I hope it will be heard, by foreign opinion, and I assure them that the position of this country is fundamentally sound. London still remains the best market in the world for foreign investments, and so far
as I am concerned and so far as the Government are- concerned, we shall take every possible step to ensure that the proud and Sound position of British credit shall be in no way impaired.

Mr. LAMBERT: The Chancellor of the Exchequer has delivered one of his impressive warnings to the House. I am bound to say that the House does not always follow the advice which the right hon. Gentleman gives. I may be able to say things which the Chancellor in his responsible position, and the right hon. Gentleman who preceded him have not said—things which will not have that injurious effect on our credit of anything that comes from the Treasury Bench. It seemed to me strange that the Chancellor should have stated that the most lightly spoken word or wrongly turned sentence might have far-reaching financial importance. Personally I cannot think that London is in such a weak position that a wrongly turned sentence would be able to have that effect. 80 far as I am concerned I can take a more detached view than the Chancellor or the right hon. Gentleman who preceded him, in dealing with this financial question. I have not been associated with the finances of the country, but 10 years ago I moved a Resolution in this House protesting against the great Government expenditure then going on. For 10 years we have had lavish and extravagant expenditure. The Coalition Government, which was headed by my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George), whom I hope we shall soon see back amongst us, laid the foundation of expenditure upon a very wide basis. I remember moving a Resolution, which was seconded by Sir John Marriott, in favour of rationing the Chancellor of the Exchequer. But the Coalition Government went. Then we had Mr. Bonar Law with his policy of tranquillity.
After that we had a series of General Elections, at which every kind of promise was made to the electors. The late Chancellor of the Exchequer suggested that it cost about £10,000,000 to implement the promises that were made at each General Election. Next we had four and a-half years of Conservative
Government, and at the last Election I was told that we had had a heaven-sent Chancellor of the Exchequer. [HON. MEMBERS: "He was!"] I understand that he will not be the next Conservative Chancellor of the Exchequer, should circumstances so arise that the Conservatives are here in a majority. I do not know whether Mr. Gandhi will ask him to go over to advise him, but he will have less chance here than in India. We have been spending ever since. The late Chancellor of the Exchequer dealt industry a staggering blow when he established the gold standard in 1925. Since then we have had a period of falling prices. It is quite impossible—it is no use minimising the fact—for us to pay our War debts, our taxes and our rates, with these falling prices. The American debt was to be paid in gold. We bought wheat from America at something like 2.21 dollars or about 10s. a bushel. We are paying with wheat at about 3s. a bushel. I warn the House that producers in this country cannot go on paying these huge rates and taxes unless there is an increase in the price of primary products.
Take the question of wheat. In. 1925 the price of wheat was three bushels to the pound. Now it is six bushels to the pound. Farmers cannot go on like that. The price of wool has dropped even more. I maintain that unless we really take this question of the price of primary products into consideration there will be a default, in spite of what the Chancellor of the Exchequer may say, on our liabilities. The right hon. Gentleman who opened the Debate talked of tariffs. [HON. MEMBERS: "No! "] He talked of something in that direction; he hinted at it. Would any possible taxation put on in this country enable, say, the Chinaman or the peasant in India, or the producers in Australia, to buy British goods?

Mr. SPEAKER: The right hon. Gentleman is going perilously near dealing with proposed taxation, and that would not be in order on the Appropriation Bill.

Mr. LAMBERT: I do not wish to be out of order. I merely repeat that unless the prices of primary products improve, Australia, India and China cannot become potential customers for the manufactures of this country. The Chancellor of the
Exchequer told us some time ago that things would right themselves. I would like to know how they are going to right themselves, and I want to know from the point of view of the producers. The right hon. Gentleman said on 23rd February of this year:
One immediate cause of trade depression was the tremendous fall in the last 12 months in the wholesale price of primary commodities. This, however, would right itself by and by.
When is that "by and by" to come? It is a serious matter. I cannot see that the Government are pursuing any policy to help the producers of this country, and it is the producers of whom we have to think. What has been the Government policy? The Chancellor said just now that they have been increasing the national liabilities. There is more spending. The other day the Government even proposed to guarantee the credit of India. I do not think they realise that, after all, it is possible to strain British finance to breaking point. There is more than that. I take the strongest exception to the Government action in spending money on State experiments. To my mind that is wholly wrong. I am an old-fashioned Liberal, and I do not believe in these new State experiments. I base my opinion upon the opinion of Mr. Gladstone, which it is well that in these days the House should consider. Mr. Gladstone said at the latter end of his career:
I am thankful to have taken a great part in the emancipating labours of the last 60 years. Of one thing I am and always have been convinced, that it is not by the State that man can be regenerated and the terrible woes of this dark world effectively dealt with.
5.0 p.m.
That is my opinion entirely. I believe that the more the State meddles in industry and the more it spends, the worse it is for mankind. [An HON. MEMBER: "Cheer up!"] The Chancellor of the Exchequer was not entirely in a joyous mood, and I think that I am ringing wedding bells in comparison with his speech. We have to consider that in this country we are to-day consuming very largely what we are not producing. Take all the tax and rate receivers. What do they produce? Do they produce anything for the food which we must import from abroad? Take again the unemployed, of whom
there are 2,660,000, all consumers, not one of them producers, or doing a hand's turn for the food which we are importing for their consumption. During the last six months our imports were something like £418,000,000 and our exports £235,00O,0OO. We have made up the balance hitherto by foreign investments, shipping, and foreign commissions. It is quite certain that the income from our foreign investments must have very seriously declined; it is quite certain that shipping has never had a worse time and that the revenue from shipping must have declined; and foreign commissions must also have declined, because of the inability of the London market to lend.
Last year, according to the Board of Trade returns, we had a favourable balance of trade of £39,000,000. This year it is more than likely that there will be an actual deficit, considering the great decline in shipping earnings, in foreign investments, and in commissions. How are we to pay for these huge imports that are coming into this country? "We can only pay for them by exports. We cannot go on exporting gold indefinitely, and the Chancellor of the Exchequer has told us just now that this unprecedented circumstance has caused the Bank Rate to be raised two points in two weeks. Therefore, I take the most grave view of the situation.
Our production to-day is not keeping pace with our consumption. We are consuming more than we are producing, and if that goes on, there is only one end to it, and that is that the imports will not be paid for. We must have enormous quantities of food and of raw materials. How the crisis will be manifested is beyond my power to say, but every delay is dangerous. The trade of the country is gradually diminishing, and the Chancellor of the Exchequer has told us that there will be a very great Budget deficit next year. How that is to be met I do not know, and I do not think anyone can tell us, but I am quite certain that anything like an increase of direct taxation would be like pouring petrol on a fire, for the direct taxpayers to-day cannot stand any further taxation without grave effects on the country.
We have had an Economy Committee set up. Each one of us knows in our constituency that it is a very easy matter
to talk of economy, but it is not so easy to practise it. I do not know what the proposals of the Economy Committee will be, but if they are put into operation, undoubtedly there will be great political agitation. I am extremely sorry that that should be so, but I would really like to see in this country a political moratorium, in the sense that if the Chancellor of the Exchequer would pledge himself to put into operation all the proposals of that Economy Committee, no other political party in the country should endeavour to make political capital out of it. It may be too much to hope for, but I would gladly subscribe to such a doctrine; and, believe me, unless something like that is done, we shall be in a position in this country like that in Germany when the collapse came and there was no money with which to pay. We are going on at a rate which means that we are so penalising the producer that we shall not be able to pay for the imports of food which we must have.

Colonel GRETTON: The right hon. Gentleman the Member for South Molton (Mr. Lambert), who has just sat down, has been a very long time in this House. His opinions have always been steady and definite, and he stands to-day where he did. I entirely agree with him that the present situation is one which needs to be dealt with, and that a negative policy of waiting for improvement will be of no avail. The trade of this country—and we ought to face the fact—is a declining trade. Even before the War there was a tendency downward. We were being pressed by rival manufacturers in the foreign markets of the world, and to some extent in the markets of our own Empire; and since the War that process has been intensified. It is the custom to complain that we are living in a time of declining world trade, but examination of the official information as to the whole of the trade of the civilised world, so far as it is recorded, shows that the interchange of exports in the world as a whole from 1924 to the end of 1929 increased. While the imports of all the nations increased from £6,880,000,000 in 1925 to £7,415,000,000 in 1929, purchases by the United Kingdom declined from £1,320,000,000 to £1,220,000,000. This decline was wholly due to decreases in our
purchases of foodstuffs and raw materials, our purchases of manufactured goods actually increasing during that period. On the other hand, while the total export trade of the world increased from £6,490,000,000 to £6,815,000,000 between the years 1925 and 1929, the United Kingdom's share of that export trade fell from £773,000,000 to £729,000,000. Again, the fall in our export trade was mainly due to the great decline in our exports of manufactured goods, the decline in our exports of raw materials amounting to nearly £2,000,000 in each of the categories of coal, wool, oil seeds, gums and resins.
I do not think I need further trouble the House with figures on this subject, except that I will add that these are taken from the official returns dealing with these matters, which may be verified by anyone who takes the trouble to put these facts together and to analyse them. The export trade, on which we must very largely live in this country, fell heavily. I will now take the figures for a year later, 1930, for this country only, and not for the world at large. The imports of manufactured goods increased in this country from £299,000,000 to £344,000,000, the exports of our manufactures at the same time fell from £573,000,000 to £439,700,000. The ominous fact is that nothing effective has been done to deal with this situation, which has been going on for some time. The Conservative Government, it is true, put on some Safeguarding duties, which the present Government immediately took off, and—

Mr. DEPUTY-SPEAKER (Sir Robert Young): I understand that Mr. Speaker has already intervened to point out that there can be no discussion on the question of tariffs in this Debate. It is necessary that I should call the right hon. and gallant Gentleman's attention to that fact.

Colonel GRETT0N: I did not apprehend, but I will submit to your Ruling, that we might not deal with tariffs and not even mention the name. I am not going to discuss them, because I know that that would be out of order, because it would mean discussing legislation.

Mr. DEPUTY-SPEAKER: I understand that Mr. Speaker barred discussion of tariffs and also of taxation.

Colonel GRETTON: It makes it a little difficult, because tariffs are taxation of somebody. I want to say a word with regard to the position of Germany, because it is the German situation which has precipitated the present occasion and led to negotiations and, as far as I can gather, great apprehension at any rate on the part of the Government of this country. We have seen them running to and fro; we have seen the statesmen of Europe and some of those of the United States of America coming to London; and we have seen bankers making journeys, of which I suggest that there is sometimes far too much. It has not given great confidence to many of us in this country to see the Governor of the Bank of England spending so much of his time on the high seas and travelling on the Continent.
The position of Germany is much stronger than is generally understood in this country, and as it was originally put forward on the question of reparations, it was entirely misunderstood. I would call attention to this fact, which does not seem to have been in the minds of everyone, either here or in the United States, that the Young Plan and the Dawes Plan provided for a moratorium in reparations. Germany under either scheme, by adopting the regular procedure provided, could claim a moratorium. An investigation of the facts was provided for both under the Young scheme and under the Dawes scheme and if the facts were found to justify a moratorium, provision was made for a moratorium of six months or any longer period up to 2½ years subject to the consent of the Governments concerned. That procedure was not adopted. Washington made certain suggestions without inquiry and there have been negotiations which have inevitably and properly led to the response of the Government of this country to the effect that if the United States and other countries forewent payment of their debts for the period indicated, we, too, would cease for that period to collect the sums owing to us, both from other countries and from our Dominions, in respect of War payments.
Germany pushed her case very far and it has led to a Joss of confidence in the stability of Germany, not only abroad but in Germany itself. This loss of confidence in the stability of Germany was not foreseen by German statesmen when Germany was "playing the old soldier." The position has been greatly exaggerated. I have obtained official returns regarding trade in Germany. These returns, I may mention, are not to be obtained in London. They are not to be found in any of the usual places of reference here. It was necessary to go to Berlin in order to obtain copies of the necessary returns. I have secured these returns and have had them translated and I propose to compare the figures of Germany's trade with those which I have just given of British trade. I take the same period, namely, 1924 to 1929, and I find that the export of manufactured goods in Germany in that period increased from £281,700,000 to £481,300,000. Germany's exports nearly doubled in that period while the United Kingdom exports of manufactured goods decreased from £618.6 millions to £573.8 millions.

Mr. DEPUTY-SPEAKER: I presume that the right hon. and gallant Gentleman is going to relate this to the financial position of the country?

Colonel GRETTON: Yes, I am bringing it in at every stage. My object is to show that Germany's position is stronger and that ours is relatively weaker than is generally realised. I have here particulars by means of which all these matters can be examined in detail, but I do not propose to trouble the House with all the figures. We know that in Germany there has been a financial crisis. It is admitted. It is also admitted that she has overspent. Are we over-spending to a much greater extent? A comparative statement of the taxable revenue and expenditure of this country and of Germany, respectively, shows that in the year 1929 the gross income of Germany—she has a larger population than ours—was estimated at £3,500,000,000 against our own taxable income of £3,131,000,000. The net taxable income was £1,823,000,000 in the case of Germany and £1,301,000,000 in the United Kingdom, and when we come to the net amount of tax collected the figures become very startling indeed. In
1928 the amount collected in Germany was £155.5 millions and in this country £227 millions. With this great load of taxation—and it must be remembered that the taxation in this country is heavier both for Imperial charges and for local charges—how can we be expected to compete on equal terms with Germany? Germany has a population which is highly efficient and which is, if I may put it in that way, less liable to engage in trade disputes than the population of this country—more easygoing, working more regularly, with fewer interruptions and, on the whole, working longer hours at considerably less pay.

Mr. R. RICHARDSON: Will the right hon. and gallant Gentleman tell us the number of trade disputes which have taken place in this country since 1926?

Colonel GRETTON: That was a blow from which this country has not yet recovered.

Mr. RICHARDSON: The right hon. and gallant Gentleman is suggesting that industrial disputes are more rife here than in Germany. I am asking him what industrial disputes we have had in this country since 1926?

Colonel GRETTON: In what I said I took no date, I repeat that the events of 1926 dealt a shattering blow to this country and during the whole period since the War there has been nothing like that in Germany. In this country there was a long coal stoppage and then there was the General Strike, and a gap was made in production in this country which has never been bridged. Germany on the other hand is in an excellent condition, becaue the money which she has been borrowing from other countries has been largely spent in fitting out her works with the latest equipment. The other day in reference to the difficulty about carrying out the moratorium Germany was advised to look to herself. The first market on which the German nation will cast their eyes is the Free Trade market of Great Britain, the one market in the world which is open and easy of access. What are we to expect in these circumstances? We shall have coal and manufactured goods and everything of the kind poured into this country and there is no protection against it. [HON. MEMBERS: "Coal!"] Yes, coal! It may come to the
dumping of coal and it has been definitely written in the German Press that in all probability we may have to face such a prospect.
It is no good closing our eyes to the facts. Hon. Members opposite seem to think that things nowadays are just as they were, but that is not the case. Hon. Members opposite seem to look upon capital as though there were an unlimited well from which they could draw all the money they want for any schemes which they can bring before Parliament. If they have not already found they will find—and in increasing degree—that that is not the case. Some of the supporters of the Government desire to strike blows against the capitalist system, and this Government has done a good deal to strike blows at the capitalist system, to shake confidence and to diminish the value of capital. But in thus seeking to shatter capitalism, they are at the same time restricting employment and diminishing our power to compete in the markets of the world and, as our capital becomes less employed, the numbers of the unemployed mount up and the charge upon the Treasury for unemployment benefit increases until it becomes a burden which no one knows how to deal with on the present scale.
Has anything been done towards meeting this situation of declining trade, increasing taxation and a mounting number of unemployed? I seem to recollect that not many months ago the President of the Board of Trade proposed a tariff truce which has proved a completely abortive scheme. Now we see from statements in the Press that some other scheme of a similar nature is suggested. But what has been done to deal with our iron and steel trade, for example, which is steadily declining? In the six months ending June this year the imports amounted to 1,272,300 tons, while the exports were only 999,418 tons.

Mr. DEPUTY-SPEAKER: I cannot help thinking that this is really a Tariff Reform speech, and is a speech of the kind which has been barred by Mr. Speaker in this Debate. I understand that what we are discussing is the financial position of the country at the moment, and whether we are spending too much or too little.

Brigadier - General Sir HENRY CROFT: May I ask if it is not competent in this Debate to discuss the position of the cotton industry or the woollen industry, and the various commissions and committees which the Government have set up, and the reports which they have failed to carry out, and the suggestions which they have failed to put into operation?

Mr. DEPUTY-SPEAKER: I understand that Mr. Speaker has already ruled that there are certain topics which we shall not discuss this afternoon and that this discussion is confined to the financial position of this country. We are debarred from discussing either taxation or tariffs on this occasion.

Mr. AMERY: On a point of Order. I understood Mr. Speaker to rule out any discussion of taxation from the point of view of suggested reforms in our taxation, but that otherwise we could discuss the general situation of the country predominantly from the financial aspect. I confess that I did not understand that Mr. Speaker ruled out discussion on the condition of our industry, and my right hon. Friend who opened the discussion discussed very fully several points bearing on the state of our trade and industry.

Mr. DEPUTY-SPEAKER: I understood that Mr. Speaker stopped the Chancellor of the Exchequer—I was not present and therefore can only use my own judgment—and rule that this must not be a tariff discussion, although tariffs are not directly mentioned by the right hon. and gallant Gentleman.

Mr. AMERY: The Chancellor of the Exchequer was embarking on a discussion on the question whether a tariff was paid by the consumer. That, of course, is not the kind of point that my right hon. and gallant Friend had in mind when he referred to the condition of the cotton industry.

Mr. DEPUTY-SPEAKER: I was not here when the Chancellor of the Exchequer was called to Order by Mr. Speaker, and as usual the two sides do not agree as to the Ruling that has been given. I have no objection to the right hon. and gallant Gentleman referring to the condition of any other country, but
up to the moment I do not see that he is getting very near to the financial conditions of this country.

Mr. LOGAN: Is it in order for the right hon. and gallant Gentleman to discuss the affairs of another country in discussing the affairs of our own country?

Mr. DEPUTY-SPEAKER: I have called him to order for dealing with that for a good time without relating it to our own finance.

Mr. WISE: I would like to get this clear, because it is important to the rest of the Debate. I take it that it is in order to discuss the position of Germany in relation to the finance of this country?

Mr. DEPUTY-SPEAKER: Yes, but I thought that the right hon. and gallant Gentleman was discussing Germany without relating it to the finance of this country.

Colonel GRETTON: I was showing the decline in trade, and I was going to give some information as to the consumption of cotton bales in the world and the share of it in this country, and to point out the decline in cotton consumption, and therefore the decline in the sources from which we have to draw revenue. I think that I have made my point, however, and I do not want to press the matter at any greater length. I am not going to advocate any remedy, but will only point out that we are taking no remedy at all. We are told about the quota and about proposals to set up an import board. Such a remedy for a decline in trade and the consequent decline in revenue will be met with great difficulty and long delay, because if the Government attempts it, they will find that they will have to go into the matter of commercial treaties with foreign countries; notice will have to be given, and those treaties will have to be revised. We want remedies here and now.
We hear a great deal about the Government doing something with Russian trade. What is the position? During the 18 months from October, 1929, to March, 1931, we bought from Russia nearly £50,000,000 worth of goods of one kind and another, and we exported to Russia to the same period about £17,809,000. Therefore, the excess of imports from Russia into this country over exports into Russia from this country amounted to the
value of some £32,091,000. The United States have no representation in Russia and no representation of Russia there, and yet they are doing a better trade. They sold to Russia in that time £38,500,000 worth of goods and they bought from Russia £6,733,000 worth. That is to say, there was an excess of exports by the United States to Russia to the value of £31,771,000. All that business has one very striking fact about it; an excess of £31,000,000 was paid by Russia to the United States and Great Britain paid an exces of £32,000,000 to Russia. We are financing the trade of the United States with Russia, and we are doing such trade as we do with Russia under Government guarantees. The whole position is absurd. The latest scheme is to make a contract with Russia for the sale of £6,000,000 worth of heavy metal goods, of which the Government is to guarantee approximately 60 per cent. at the risk of the taxpayer. The whole position is absolutely absurd. We are losing on these transactions, and the United States is making a very large profit at the expense of our exchange and our market.
We are now waiting for the report of the Economy Committee. So far, the Government have not acted on the inquiries they have set up. The unemployment insurance report was one with which they dare not deal. The pressure of their back benchers may reduce, rightly or wrongly—I am merely pointing out the cold hard fact—the economies which their own inquiry recommended, and which were estimated to reduce expenditure upon the unemployed by £30,000,000. They will reduce it by their amendments to the Government's Bill to one-tenth of the amount which the Government's own committee recommended. It is unfortunate that we have not to-day the report of the Economy Committee. We have to economise, and if this Government will not economise, another Government must be found to do it, or the country will be ruined. Everyone knows that the report is of a widespread character and will greatly embarrass the Government when they come to put it into operation. The Liberals are in the same position as the Government. They are keeping the Government in Office, and it is absurd to
talk of two Oppositions. There is in fact one Opposition and a Coalition, and on every occasion when the Government propose expenditure, the Liberals support them against the criticism and the proposals for reducing expenditure which come from the official Opposition.
This kind of thing cannot go on. We are all agreed that it cannot go on, and the position is pressing upon us here and now. Many of us, whether in the House of Commons or in the City or in the country, will go on our holidays with much apprehension, for there is little comfort in the Government. No doubt they are now somewhat repentant when they see the effect on national finance of all their extravagances and their attempt to put Socialist doctrines and theories into practice. The Liberals, though their numbers are small, are divided on all controversial questions, and the only thing on which they seem to be united is their determination not to allow the Government to be turned out of office. In these conditions, where is the material for a national Government which has been urged? Where is the material to be found for a strong, united, decisive movement to reduce expenditure and to support our declining foreign trade? How many on the other side or on the Liberal benches will agree to turn from Europe and endeavour to find a solution of our difficulties in the Empire itself?
I think that I have shown the House that the position of this country is relatively worse in business and trade than many Members realise, and that the position of other countries has grown stronger while ours has grown relatively weaker. Nothing effective has been done. It is not too late. I believe that the country can be saved I believe that the nation is sound, and that if our resources and the natural energies of our people are rightly utilised, they will not be found wanting. The fault is here, among the politicians, more than in the nation. The nation desires to be led, and led in the direction in which it knows it ought to be led. The politicians dare not take the steps that are necessary. All democracies are extravagant. Turn back the pages of history, and you find democracies have always been extravagant.
Many of the democracies of the past have passed away on account of extravagances with which they could not cope. When you add to the number of voters, you are adding to expectations, and politicians encourage expectations of what may be had from the State. You are not making it easier to economise when you increase the size of your electorate.
We have got to face these facts, and if they cannot be handled there is ruin, not only for the capitalists, not only for the Conservative party, but for those vast masses of our countrymen and women who listen—and many of them believe—that there is something to be gained by the destruction of the system under which our country has been built up and under which we have hitherto gone forward. We are now finding the pinch. The remedies are there. A great many of the hon. and right hon. Members opposite know where the remedy is to be found. We on this side know. The remedy is economy, and such measures as can be taken later; but I must not go further in that direction in this Debate. If we delay too long, there will be a still longer hill to pull up. Each month's delay makes the reforms and the changes more difficult. This Government cannot make them; they have not the courage, and they are not supported by their followers in doing that which is necessary; but there are others waiting to take their places and to do their best to save the country.

Mr. WISE: The right hon. and gallant Member for Burton (Colonel Gretton) has, I gather, linen occupying his time delving into the figures of at least one foreign country. I would recommend him to carry his researches a little further, and I would point out to him that he will find it much easier than he seems to think to find the statistics of German trade and finance, and the statistics of other countries, if he will search the admirable statistical bulletins issued by the League of Nations at Geneva. I know he dislikes that particular institution, but, at any rate, I am sure he will agree that the figures are reliable.

Colonel GRETTON: That is what I and my friends have consulted.

Mr. WISE: If he had done that, he would have discovered one most glaring and unfortunate omission from his
statistical argument, which has vitiated nearly all his conclusions. He said the position of this country was getting worse, relatively, to that of other countries. He took the statistics of this and other countries up to the year 1929. If he had pursued his researches into 1930 and 1931 he would have found, in the quite exceptional and terrific disaster that has overcome world trade in the last 2½ years, that relatively this country had weathered the storm better than nearly all its rivals. He said this country is not producing and is consuming, and that other countries which are not cursed with a Socialist Government, as he would put it, are prosperous, and he urged us not to shake confidence in this magnificent capitalist system. At the present moment it seems to be shorn of a good deal of its magnificence. I would like to ask whether he supposes that the lack of confidence, engendered, if you like, by this Government and its supporters, here or elsewhere, is responsible for the slump in America, the very ark of the covenant of the capitalist system. During the years from 1928 to this year the monthly production in American industry has dropped proportionately very much more than the production in this country. He will find from official figures that American production now has dropped by 25 to 30 per cent. as compared with 1928. The production of this country, though it is reduced, is reduced less than that of America and of Germany and of most of the other important European countries, with the Single exception, I think, of France and, possibly, Sweden.
One of the most remarkable features of the present situation is that between 1928 and 1931 the production of most countries has dropped by about 20 to 30 per cent. on the average, and our production has dropped by only 10 per cent. It is quite true that our export trade has diminished, though not nearly as much as the export trade of America and most European countries—proportionately. The production of this country has maintained a stability which, having regard to the world situation, is very remarkable. It is quite clear—the bank returns, the clearings and the traffic on the railways show it—that what has happened is that our home market has suffered far less diminution in these last few months of crisis than the home trade of any other country. Our export trade has dropped
because world markets have slumped. Our home trade seems to have remained, not quite but very nearly, constant. One reason for that is that by unemployment insurance and all the other devices which hon. Members opposite are so anxious to end we have maintained to a very large extent, so far as primary necessities are concerned, the purchasing power, low though it was and is, of our people. If the drastic economies which are now proposed were put into operation the effect would be to reduce our home trade to the disastrous position of our export trade, a circumstance which, I hope, will cause the Government and this House to hesitate a very long time.
Compare that situation with the position of Germany. There an entirely different phenomenon is observed. Germany's total production in those last three years has dropped by 30 per cent. or more, but, as the hon. and gallant Member has said, her export trade, in volume at any rate, has increased. Actually her exports in these months of 1931 have been 8 or 9 per cent. more in volume what they were in 1928, but her home market has completely collapsed, and the parlous position in which Germany finds herself, in spite of all the rather extraordinary propositions to which the right hon. and gallant Member committed himself, is due not to the destruction of her export trade, but to the collapse of her home trade.

Colonel GRETTON: Perhaps the hon. Gentleman will observe that I remarked that confidence in Germany herself has been shattered and shaken—confidence among her own people.

Mr. WISE: That may be, but what can you expect when wages are being cut down, and when every conceivable means is being devised to put into operation the sort of policy which hon. Members opposite are now beginning to press on this Government? How can you expect confidence to remain when you tell every worker that unless his wages are reduced by 25 per cent. or thereabouts the country will be ruined? Let us face up to this question of confidence. There is the confidence of the investing class, which, so far as this country is concerned and despite all that is said by hon. Members opposite, is not yet—and I think happily so—really reduced. There is very little evidence of money being
abstracted from this country by British investors for investment abroad—there is no sign of it at all. There is no proof of it in the figures, and no evidence of it. There is confidence among the mass of the population.
In this country, rightly or wrongly, we have preserved a certain amount of confidence in the mass of the population that they and their children are not going to starve. We have left them with a very emaciated and not very luxurious or satisfactory life, but at any rate they have been saved, and believe themselves safe, from complete and irreparable disaster; and I believe that in facing the admittedly difficult situation in which we find ourselves it is very important that we should preserve the confidence of the people—the 80 per cent. of the people of this country, not the best people, but the working people, the best people as some might define them. It is more important that we should retain their confidence if we are to weather the storm which is breaking on us at this moment, not through the action of this Government or through the action that any Government in this House could have taken, but owing to world circumstances which are the product of the actions and activities of a great number of people, and which represent, broadly speaking, the collapse on a world scale of what is known as the capitalist system. Let us face up to the fact. The system of world trade as we knew it in the 19th century is in a state of collapse. It is adjusting itself to a new world, and whatever may be the outcome of this present crisis we shall never get back to the world as it was. Before I leave the points made by the hon. and gallant Member opposite, let me draw his attention to one other very significant fact which he could also discover from the League of Nations statistics. The only country in Europe whose production has increased or whose imports and exports have increased in these last three or four difficult years is Russia. He can explain it how he pleases.

Colonel GRETTON: They were very low to start with.

6.0 p.m.

Mr. WISE: Oh, no. In 1928, Russia was practically back to her pre-War industrial production, and agricultural pro-
duction, too. In steel, in pig-iron, in the transport over the railways, in agricultural production, despite the collapse of the rest of the world, Russia has not only maintained her position but has steadily improved it. It is a point of very great importance. Russia has insulated herself very largely from the disasters which have befallen the capitalist organisations of the rest of the world and has weathered the storm. That is hardly true of any other Continental country. We cannot discuss the finance of the country as if it were solely a question of a penny here or two-pence there on this or that tax. It is plain that the Budget position, if present tendencies continue, will be a very serious one by March of next year. It is plain that the trade position of the country is in a very bad way. Several hon. Members opposite have alluded to this question, and they have told us that it is bad because the world trade position has collapsed. We cannot expect to put right our financial position until, by some means or other, the world situation changes. I was very much interested by the examples which were given by the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) to illustrate his point a to the action taken by other countries, and he mentioned Germany. I want to deal with one other very important fact. Germany's growth in exports in the last few years is no natural or healthy growth, but it is one which has been forced upon her by insisting at all costs on meeting her liabilities in regard to Reparations and other liabilities incurred since the War, and the constant pressure of Reparations upon her. To meet these liabilities, Germany has increased her export trade at the expense of the standard of life of her own people, and she has done this deliberately. She has got rid of her goods abroad at a low price, and has looked to her home markets in order to cover the loss on her exports. That is the situation into which the reparation arrangements have driven Germany, and it has ended, as it was bound to end, in the collapse of Germany, and in the collapse of the whole system which she has adopted in order to meet her difficulties.
It is vital in these discussions, when we are dealing with this situation, to recognise frankly that no temporary
moratorium in regard to our Reparations and War debts will get us out of our own difficulties; indeed the value of a temporary moratorium is beginning to evaporate in Germany, and you will get no re-establishment of trade in Germany on a proper co-operative basis with the rest of the world until the whole basis of Reparations and inter-Allied debts, which are pressing heavily on the peoples of the world, is wiped out. Let us be under no delusion on that point. It is clear now that American opinion, which has always been very touchy in connection with this question, has been forced by the difficulties in which America finds herself, to recognise these facts. Naturally, America is anxious not to alarm or scare or press too hardly American opinion. The salvation of Europe and of America, and the restoration of prosperity to trade, and the removal of the terror of famine, hunger and destruction and political disturbances which would shake the existing political system in Europe to its foundation, depend upon the people of countries like our own and America in particular recognising that the basis on which we are proceeding in regard to Reparations and War debts is pressing more and more on the people of the countries concerned, and can no longer be maintained.
Let us face the facts, and then proceed to consider the reorganisation of trade and international relations on the basis upon which they must be established. The German collapse was undoubtedly accentuated and hurried by the drop in the price of raw materials, and it was preceded by almost a collapse in Austria which would have affected most of the European countries, none of which are now paying any Reparations because they were released from that obligation 10 years ago. Austria's misfortunes are not due to Reparations; they are due to the breakdown of trade in Eastern and Central Europe, and to the fall in the value of the products which the agricultural countries produce. Rumania, Bulgaria, Hungary, Jugoslavia, Canada, and Australia can no longer buy the goods which the industrial countries produce, nor can they pay the interest on the national loans or on the mortgages on their businesses. That situation, accumulating in intensity as prices fall more and more and the world trade diminishes, has brought
Austria to the edge of collapse, and it has precipitated the situation in which Germany finds herself now, because if those countries cannot buy, obviously the industrial countries cannot sell.
Even if we deal effectively and completely with Reparations and the debts problem now, as long as that situation continues, as long as there is no harmony and no relation between the prices of what the agricultural countries sell and what the industrial countries sell, we cannot expect to restore the world trade, to restore the export trade of this country, or to restore our finances to a better position. It is true, as the Chancellor of the Exchequer has stated, that the financial position of most other comparable countries is infinitely worse than our own. I think the immediate crisis is very much worse than hon. Members opposite seem to believe, or that public opinion has been informed by the Press or otherwise. It is unfortunate that we have not had a clear and considered statement by the Government in regard to what is the worst crisis of world commerce since 1914, and even if we get round that difficulty I do not believe that its effects will be felt for more than a few weeks, and we shall not get out of the rough waters until we deal drastically with the fundamental problem of the breakdown of the system of exchange between various countries which has been intensified by the collapse in prices.
Proposals have been made, rather tentatively, to meet this position in the report of the Macmillan Committee, and I think it is vital that we should begin to examine fundamentally the basis of the financial and currency system under which this country lives, and under which the trade of the world is carried on. To talk about cutting down by 10 per cent. the salaries of civil servants, economising on national insurance, and doing the things which the Economy Committee seemed to contemplate, will not cure the problem, but will make the immediate problems before us still worse by destroying the home market, and that will bring about a state of things worse than that which exists at the present time.
We have to face up to a reconstruction of the whole basis of world trade. We have to recognise that the system of
trade and exchange, as we knew it in pre-War days, with all its embarrassments and difficulties, is about to collapse. This country should take the leadership in guiding the world on to a different system. We want a system based on a real recognition of the fact that no longer will the peoples of the world consent to have their livelihoods and destinies placed at the mercy of irresponsible bankers, however public-spirited, however competent within their narrow way, but entirely outside public control.
With regard to the immediate proposal which the right hon. Gentleman the Member for Edgbaston put forward in relation to economies, it is not easy to discuss that question in the absence of the report of the committee, but I would like "to say that I believe that the right hon. Gentleman was proceeding along a line which would do more harm than good. His proposal would be fundamentally unjust, and it would be appalling if the Labour Government proceeded to take part in a campaign for the reduction of wages and allowances—I do not believe they will—without dealing in advance with what is the biggest burden on the revenue and the least defensible, the cost of interest on inflated War Debt and its effects. As far as we on these benches are concerned—I am not speaking simply for myself, but for many other Members on this side of the House—we shall view any such proposal as that with very careful scrutiny and suspicion, and if our anticipations are right, the Government can rely on as strong an opposition from these benches to any attempt to make our situation worse as we put up to the Anomalies Bill a week or two ago.

Mr. BOOTH BY: Few people who might have had an opportunity of attending Debates in this House during the past few weeks would have supposed that we were passing through one of the greatest economic crises in our history; and I should imagine that few people who attended the Debate at this moment, and looked at the condition of the benches on both sides of the House, would imagine that at last we had an opportunity of getting to grips with some of the economic facts that really matter at the present time. Among these facts I cannot include such ques-
tions as electoral reform and the taxation, or rather, the hypothetical taxation, of land values two years hence, upon which the Government have been wasting so many hours, days and weeks during the past three months. For that waste of time the Government, and the Government only, are responsible; and, by taking this course of action, and inviting us to consider masses of legislation wholly irrelevant to the one economic problem that matters, they have brought the House of Commons into some discredit as well as themselves.
The hon. Member for East Leicester (Mr. Wise) invited the House several times to face the facts. I think that everyone who has spoken in this Debate has made a real attempt to face the facts, and I want to try and face one or two of them myself. Take, first of all, the budgetary position. It is unnecessary to go into it in any detail, after the speech of the right hon. Gentleman who opened the Debate; but, having sat for nearly three years behind the right hon. Gentleman the Member for Epping (Mr. Churchill) when he was Chancellor of the Exchequer, and having listened to the endless reproaches and castigations which he received at the hands of the present Chancellor of the Exchequer, I cannot help being slightly amused at the great change in tone and attitude which the right hon. Gentleman adopted in his speech to-day. The Chancellor of the Exchequer enjoys the reputation of being a man of principle, and of rigid intellectual integrity. He has been widely described as the Iron Chancellor. I must confess that I have always regarded such people with considerable misgiving and apprehension. The man who makes no pretensions to higher public rectitude than his fellows can usually be trusted to do his best in the practical affairs in which he is engaged from day to day; but these men of rigid principle, when they do crash, crash so far, and go so far from the path of rectitude, that it is much more embarrassing than when you get a few small deflections from what may be regarded as strict orthodoxy in order to meet a temporary emergency; and no one can say that the right hon. Gentleman the Member for Epping was ever at any stage guilty of more than that.
The Chancellor of the Exchequer is handling the national finances, whatever he may say, in a way that the right hon. Gentleman the Member for Epping would certainly never have dared to do; and, although the right hon. Gentleman rightly appeals to us to take a patriotic view, and say nothing in the House this afternoon that would endanger the credit of this country abroad, nobody can deny that the national balance sheet for which the present Chancellor of the Exchequer is responsible is, on the face of it, a dishonest balance sheet. It is not a balance sheet that any company at the present time would dare to issue. As was pointed out by the right hon. Gentleman who opened this Debate, to balance the estimated deficit for this year the Chancellor of the Exchequer had recourse to those very expedients which he himself described in 1927 as "jugglery and deceit." Of £37,000,000 of non-recurring revenue, he has raised £20,000,000 from the Exchange Fund, £10,000,000 by a forestalling of Income Tax, and another few millions from the Rating Suspense Account, in order to meet recurring liabilities. No one can say that that is, on the face of it, honest finance. Over and above that, the right hon. Gentleman, despite what he told us this afternoon, is borrowing £50,000,000 a year in order to meet current liabilities; and sooner or later that situation will have to be faced.
The right hon. Gentleman attempted to defend himself in his speech this afternoon, but I should like to ask him, how does he contemplate dealing with the debt of the Unemployment Insurance Fund, which at the end of this year will amount to over £100,000,000? Does he seriously believe what he tried to make out this afternoon, namely, that the fund itself will be able to discharge the debt? Of course he knows, as everyone knows, that ultimately the liability for the repayment of that debt will fall upon the national Exchequer. I want also to know how he proposes to deal generally with the deficit which he has admitted to us this afternoon he anticipates next year. He himself has increased unproductive expenditure by something like £60,000,000 a year. I do not see that any useful purpose is to be served by blinking these facts. The hon. Member for East Leicester said, let us face up to
them, and I say, let us face up to them. The right hon. Gentleman told us this afternoon that his estimate with regard to revenue from Stamp Duties was based upon a renewal of Stock Exchange activity, but he knows that there has not been the slightest sign of a renewal of such activity, nor is there any reason to suppose that there will be during the remainder of this financial year. He is going to be faced with a very serious deficit next year, and I think we are entitled to ask him what steps he proposes to take, and how he imagines he is going to deal with the situation.
The right hon. Gentleman has admitted by action far stronger than words that, in his opinion at any rate, if not in the opinion of the hon. Member for East Leicester, the limits of direct taxation in this country have been reached. We must ask him, therefore, does he expect to balance his budget, which he said he proposed to do, next year, by economies to the tune of about £100,000,000 a year? He has not made a very good start. We do not know what may be in the report of the Economy Committee, but there are two lines along which substantial economies might have been effected by the right hon. Gentleman. One was by the reform of the system of Unemployment Insurance, but he has not adopted that line, and the Government have not adopted it, in spite of the recommendations of the Royal Commission. The other is by what the Chancellor of the Exchequer himself referred to in his speech this afternoon, namely, a conversion operation on a very large scale. The right hon. Gentleman now invites the pity and sympathy of this House because, he says, the European financial crisis has prevented him so far from carrying through the great conversion scheme which he had prepared. We are entitled equally to remind him that the technical conditions, as the right hon. Gentleman knows, and as the Financial Secretary knows, were never more favourable for a large conversion operation than they were about 15 months ago, at the time when the right hon. Gentleman introduced the Budget before last.
Why did he miss his opportunity then? He missed his opportunity because he imposed another 6d. on the Income Tax, and that had such a disastrous effect upon the money market that for the time being it
made a conversion scheme out of the question, although the technical conditions were never more favourable. Therefore, we have a right to be alarmed, because, whatever the Economy Committee may say, the Chancellor of the Exchequer has missed at least two great opportunities of achieving large economies of a kind that matter; because I agree with the hon. Member for East Leicester that the mere cutting down of wages in a few Government Departments is not going to have any vital effect upon the economic condition of this country one way or the other. We ought to be on a 4 per cent. basis, but to-day we are on a 5 per cent. basis. For that, we on this side blame the Chancellor of the Exchequer; and the Government are primarily responsible, owing to the lack of confidence which they have engendered having rendered conversion operations unfeasible. It is very ironical when we hear so many denunciations of the "rentier" from hon. Gentlemen opposite, to reflect that their Government is responsible for paying the "rentier" 5 per cent. instead of 4 per cent. The Chancellor of the Exchequer has increased the burden of direct taxation by anything from £40,000,000 to £60,000,000 since he came into office, and he has increased expenditure for unproductive purposes by a similar amount. The rate of direct taxation is seven times what it was before the War. Whatever the hon. Member for East Leicester or any other hon. Member may say, we on this side of the House maintain that that is a burden which in the present condition of world trade, no industry in any country in the world could possible stand.
The Chancellor of the Exchequer said that there were two remedies, and two only, for the present budgetary position. The first was real economy. I wish we could feel certain that he really meant to carry it through. The second was increased taxation. I am precluded by your Ruling, Mr. Speaker, from developing an argument in favour of the only method that is possible at present of increasing taxation, namely, a revenue tariff. I agree that there are no other means. We are now in such a serious financial position that we have to adopt both the method of economy and the method of increased taxation in order to
balance our Budget, which is the first necessity; but I do not see the Chancellor of the Exchequer, unless he changes his tactics and methods very strikingly, achieving either the one or the other. For the first, he needs the support of the party behind him, and that support he has not got. And for the adoption of a revenue tariff, very different fiscal views are necessary from those of the right hon. Gentleman.
I now come to another question upon which the hon. Member for East Leicester briefly touched, namely, the question of the monetary policy which has been pursued in this country for some time past. It is obvious that neither the Chancellor of the Exchequer nor any right hon. Gentleman in a position of responsibility upon the Opposition Front Bench is in a position to go into a question of this very delicate character, because anything they said might affect our credit in the world outside this country in a damaging manner; but it seems to me that this is a subject that ought to be ventilated by private Members. What is the phenomenon with which we are confronted at the present time? It is, surely, a very strange one. Millions of people all over the world are insufficiently supplied with the necessaries of life; and, at the same time, there is an unprecedented volume of world production and capacity for increasing production; and, on the top of that, there is world-wide unemployment. It is really an extraordinary situation; and, in my opinion, the theory of over-production, except in the case of certain basic industries, is not really a sufficiently good or valid explanation. It seems to me that there is something wrong with the system of exchange; and I think that sooner or later we in this country will have to face up to this question.
Some of us for several years past have ventured to express in this House doubts as to the wisdom of the monetary and financial policy pursued in this country ever since the War. By no one have we been treated with more lofty disdain than by the present Chancellor of the Exchequer, who once described the Bank of England, in a moment of exuberance at a luncheon in the City, as the greatest moral force on earth. I am not prepared to admit that the monetary policy that has been carried out by the Bank
has at all periods necessarily been right. As any rate, we are entitled to ask what are the results of the monetary policy which has been pursued by this country for the last 10 years. Wholesale commodity prices have dropped from an index figure of 166 to one of 137 since 1924; and, of course, there was a sharp drop before that, after the slump of 1920. Agriculture is down and out in this country at the moment. It is no good blinking that fact. Cereal farming is in a desperate position. All over the country land is going down to grass, and people are leaving the countryside in order to swell the volume of unemployment in the towns; and I, for one, submit to the House that no country will ever be prosperous unless it has as its foundation a prosperous agricultural industry. If you look back over the economic history of the last century, you will find that, whenever there has been a credit stringency, whenever there has been a fall in commodity prices, there has always been agricultural depression; and whenever there has been a period of monetary expansion, usually following the discovery of fresh gold, there has always been a revival of prosperity in the countryside. Not only that, but our exporting industries are practically crippled, as hon. Members on both sides of the House know very well; and, measured in terms of commodities, the National Debt has been increased by over £1,500,000,000, whatever the Chancellor of the Exchequer may say.
The right hon. Gentleman said this afternoon in answer to a question that it was impossible to give an exact calculation of the increase in the real weight of the National Debt due to the policy of deflation. I agree that it is impossible to give an exact calculation, but you can give an approximate calculation, which he refused to do. We can say, and it has been confirmed by some of the most eminent economists, that the real weight of the National Debt, as the result of our monetary policy, has been increased by approximately £1,500,000,000, representing an average annual additional burden of between £50,000,000 and £100,000,000. In addition, as a result of this policy, the real burden of all debenture and fixed interest charges has been increased in proportion. Every debtor all over the world, national, or private individual
citizen has been made poorer; and the burden upon him has been increased. Sir Josiah Stamp in a recent article summed up the situation when he said:
The present uncontrolled international monetary system has tacitly assumed its power to provide sufficient stability to obviate injustice and economic disaster and has failed signally to provide it.
A variation of such a kind as we have had in the price level cuts at the very root of every contractual obligation. One could go on arguing about it for hours, because there are endless aspects of the question. But the fundamental point is that if you get a stable price level, once you get your costs and your wages adjusted to it, it is possible for agriculturists and producers and manufacturers to make a profit; but the one thing that makes it absolutely impossible for any producer to make a profit is if he has to work against falling commodity prices. If he gets a "table price, it does not matter if it is low, but a falling price level is fatal. We have had a falling price level to compete against for 10 years, and that is at the root of our economic trouble. What was the object of this financial policy? It was to establish and maintain what is called the financial supremacy of the City of London. Where is that supremacy to-day? During the last few days the bankers of London have been making a veritable procession to Paris, begging for favours from the French Government and French financiers, which they have been most unwilling to accord. The real truth of the matter is that you cannot build up any sort of financial supremacy upon a foundation of agricultural and industrial bankruptcy; and we have to set about restoring our agricultural and industrial supremacy as the first objective. It has been worked out that the annual increase of production all over the world is about 3 per cent. The annual increase in the amount of gold that can be made available for monetary purposes is not more than 2 per cent. If that is the case, failing international co-operation and the stabilisation of the value of gold in terms of commodities, we are bound to be faced by a further fall in commodity prices.
What is the immediate practical remedy? I do not want to advance this in any dogmatic spirit, but it is a ques-
tion which deserves most careful consideration on the part of the Government and financial authorities. The immediate practical remedy, in my opinion, is the remonetisation of silver in some form or other. I do not see anything else that can alleviate the present situation. In 1920, the value of silver was 7s. 6d. an ounce. To-day it is 1s. 1d. an ounce. I wonder by how much that has reduced the purchasing power of the 1,000,000,000 people who live in India and China. I wonder what the effect of it has been upon the export trade of the country and the general trade of the world. By debasing the currency of the East, I believe we have dealt a very serious blow, at a difficult time, at the standard of life of the West. There are labourers in China who, as a result of the debasing of the value of silver, are getting wages of not more than £1 a month. Supposing you get a great industrial development in China or India, especially if you hold the Free Trade theories of hon. Members opposite, how on earth are we to stand up against an economic assault of that kind? It is going to be absolutely impossible. The Chancellor of the Exchequer may say that, if we adopt such a policy in order to give silver a monetary value, we shall in effect be coming off the gold standard. My answer is that it would be better to take a step of that kind than to be forced off the gold standard in a state of economic collapse, which seems to be the only alternative that confronts us. We hear much about international co-operation. The present Government used to be keen on it at one time. They sent the President of the Board of Trade to Geneva to conduct a whole series of futile and abortive conferences with regard to a reduction in European tariffs; and the Minister for Mines followed him, and also conducted some equally abortive conferences with regard to the coal-mining industry.
The one international conference that might have been of real value the Government has never touched at all. The Genoa resolutions, which were passed as long ago as 1922, recommended an early international financial conference to see whether it would be possible to stabilise the value of gold in terms of commodities and to economise its use. That conference has never yet been held. No
international conference has ever been held to consider the one matter which is of vital international importance, and concerning which such a conference might be of real use. On many occasions, when some of us have asked the Chancellor questions about it, he has always turned it down, and refused to give us any satisfaction, or indeed any reply at all. Why does not the Chancellor summon an international conference to consider this vital question of the stabilisation of world commodity prices, the most urgent economic necessity of our time? Why does he not ask the American Government to consider the question of the remonetisation of silver? Would they refuse to consider it? I doubt it. But if they did, even if international co-operation were to break down, why should not this country proceed to consider the whole question from an Imperial point of view? Is it impossible to get the co-operation of the Dominions in the establishment of a system of Imperial currency, in which silver shall play its part, designed to maintain commodity prices within the British Empire, and, if the rest of the world refuses to co-operate, endeavour to maintain within the British Empire a standard of life higher than the rest of the world enjoys? I believe that could be done.
The disheartening thing is that the Government are apparently content to let everything drift, and to take no action either of an international or an Imperial kind to deal with the situation. We are living in a world, whatever the Government may say, which is predominantly nationalist, especially from an economic point of view; and in my opinion we must adopt a predominantly nationalist and Imperialist policy. I believe that the economic policy we have been attempting to pursue has broken down. And certainly the nationalist economic policy pursued by France has not been wholly unsuccessful. As a matter of fact, until we play our own hand, and fight for our own interests, I do not believe we shall ever get world economic co-operation; because the rest of the nations of the world will be content to go on taking advantage of us and enriching themselves, as they are now doing, at our expense.
This brings me to the last point that I want to bring before the House,
namely, the relationship between foreign and home investments. Before the War, it is estimated that we exported about £7,000,000,000 worth of capital, representing the surplus wealth produced by our people. The late Financial Secretary to the Treasury has estimated that of that amount we lost altogether about £3,000,000,000. We gained much, but we lost £3,000,000,000. To-day the conditions are much less favourable for overseas investments. Our own industries are, by general assent and admission, starved of the capital which they require more than they have ever done for re-equipment in order to compete with the industries of other countries; and yet we continue to lead abroad upon a gigantic scale. Germans, Greeks, Austrians, Hungarians and Poles have only to come to us and they will get loans of different sorts and kinds. Do they benefit so very much? Take, for example, the case of Australia. I suppose no country, in proportion to its size and population, has borrowed so much during the last 50 years as Australia. She has enormous debt obligations, amounting to about £1,000,000,000. Owing to deflation and to falling commodity prices, it requires twice as much human effort to pay the interest on that debt to-day as it did in 1924. That is one of the reasons why Australia is flinching at present; because the burden of her external debt is hanging round her neck, and that burden has been doubled in the last few years.
The French, on the other hand, during the last few years, have kept their money at home and borrowed from no one with successful results. We have borrowed short from them. They only lend us their money short, and they know London is a safe market. We have then lent to Germany long, at high rates of interest. The result is that municipal swimming baths have sprung up all over Germany. Is that good for Germany? What has been the effect on Germany, and on us, of this policy? We have seen something of it during the past few days And it was a French economist who wrote recently that the large foreign credits granted in 1928–29 by Great Britain had led to continuous sales of sterling by borrowing countries, and were therefore, mainly responsible for the gold exports
which have caused such anxiety to our financial authorities. I only throw this out as a suggestion, but I do think the relationship between our investments overseas and our investments inside this country deserves to be very carefully considered by the authorities, not only of the Government, but also of the City. I believe we ought to endeavour, especially in the light of French experience, to deflect the flow of our surplus wealth available for investment as much as we can to home industry, to agriculture, to the re-equipment or our own industries; and a little less to the establishment of municipal baths in Germany, which do not necessarily benefit Germany in the long run, and certainly do not benefit us. Until you get a Government that will give our industries that protection without which they cannot function, you will not be able succesfully to do this. But it is a question that requires very serious consideration at present. It is not so much the creation of new debts and the lending of fresh credits of which the world stands in need; but the remission of existing debts which is an urgent matter; and that is the question upon which the Government ought to concentrate.
I have tried to direct attention to what I believe to be three vital aspects of the world economic problem, first of all, the budgetary position, which I believe to be dangerous and which, as it stands at present, calls in question the whole economic stability of this island; secondly, the monetary policy which has been pursued by this country during the last 10 years, and which I believe to have been, in the long run, calamitous; and thirdly, the policy of overseas investment, which I believe warrants the very closest reexamination by the authorities. These are questions which have to be faced whether we like it or not. We have drifted along too long. What depresses me so much about the Chancellor of the Exchequer is when he goes on saying that unless there is a revival of world trade, or an improvement in the general position, he is afraid that this or that will happen. It never occurs to him, or to the Government, to do something themselves. If you are on the bridge of a ship which runs into a very severe storm, you
batten down the hatches; but the officers do not go down to the cabin and get out a gin bottle and pray for the storm to come to an end. They do something about handling the ship, and negotiating the storm.
The Government have not shown the slightest inclination to take a grip of the situation. They seem to think that it is quite impossible that this country or this Empire should do anything on its own in order to try to get out of the difficulties we are in at the present time. Tacitly they accept the explanation of the world crisis as the cause of our troubles; and they make it plain to this House, and to the country, that in their opinion we ourselves cannot do anything to try to get out of the present position. They think that mysterious world forces over which they have no control, and cannot exercise any control, are solely responsible for our predicament. I do not believe it. I believe that we can do a great deal to help ourselves in this crisis, because it is a crisis. I believe that if we could get a Government that was not afraid to tackle the vital questions which affect us, and not afraid to govern, we should get through in a surprisingly short space of time. I only hope that that Government will not come too late.

Sir GODFREY COLLINS: The hon. Member for East Aberdeen (Mr. Boothby) has delivered a very thoughtful speech, and has directed the attention of the House to some of the fundamental questions which affect Great Britain. His first point dealt with the monetary policy of this country, and on that, I presume, he criticised Great Britain for returning to the gold standard a few years ago. The return of this country to the gold standard not only maintained British credit abroad, but it enabled our country to buy more cheaply everything we required from foreign countries. We were enabled to buy the cotton we required at a lower price than formerly, and our workpeople were enabled to buy the food they required from other countries more cheaply because we faced a return to the gold standard. It is far more important that this country should buy cheaply from abroad, for by buying cheaply from abroad we are able to sell goods more cheaply in return.
The hon. Member questioned the fall in prices. I am one who thinks that a fall in prices is of great advantage to this country. I know that that view is disputed in many countries and in many parts of this House. A fall in prices denotes plenty, and I think that plenty is better than scarcity. I do not deny for one moment the hardship which a fall in prices brings to all those who have commodities to sell. No one desires to question that fact. But for many years, from 1914 to 1920, while every individual who owned commodities slept, those commodities rose in price. It was a very great advantage to all those who owned commodities during that time. When we speak of the sudden fall in prices, it is really a return to the pre-War prices, and in some cases it means lower prices. Although it is painful for this country to adjust prices to the new conditions we, in my opinion, dependent as we are upon selling our goods to enable us to buy the goods and food we require, find that low prices are of greater value to this country than they are to any other country in the world. The hon. Member referred to the question as to whether we should lend abroad as freely as we did in bygone years. There, also, I differ from him. At the same time that we lend abroad we are able to buy the raw material and the food which we require, and if we are enabled to lend capital abroad we are enabled to buy foodstuffs, and raw materials for our industries.
I have risen to make one or two short references to the speech delivered earlier in the afternoon by the Chancellor of the Exchequer. I am sure that we all welcome his fixed determination to maintain British credit, and the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) also struck that note. The maintenance of British credit is essential to every wage-earner in this country. The Chancellor informed the House of Commons how he proposed to maintain British credit. I will touch on one side of that speech, the necessity of reducing expenditure. He stated to the House that economy in practice was never popular, and that the Government, when the House reassembled, would submit their proposals based upon the recommendations of the Committee under the
chairmanship of Sir George May. If I understood him aright, a minority Government could not take responsibility for accepting all those recommendations. What those recommendations are we shall know to-morrow.
During recent months it has appealed to me very strongly that to enable this country to maintain her credit in the way we all desire we shall have to look afresh at our expenditure and the commitments embodied in the Consolidated Fund Bill. Whether a party Government can tackle that matter successfully is open to question. We have the case of Australia to-day where their exchange has broken down, where unemployment is rampant and trade is bad. All parties there have felt it necessary to come together to save the credit of Australia. You have the same thing in America, where President Hoover before he made his speech delaying payment of War debts for one year called into his council representatives of the Senate and his political opponents. We have the same sort of thing happening to-day in Germany where party Government has broken down.
If the situation develops, as it may well develop, we may be faced with the necessity of a national Government composed from each party in the State. I speak, naturally, for myself, and myself only, when I say that I would welcome the formation of such a Government if by so doing it enabled our country to raise still higher the credit which we need. We have for the last 13 years pursued a policy which has brought our expenditure and our taxation higher than those of any country in the world. The Chancellor of the Exchequer this afternoon told the House of Commons that his Budget position compared favourably with that of America and other countries, but he omitted to state at the same time that this country is more heavily taxed than any other nation in the world. The policy adopted quite definitely by all parties in this country during the last 13 years, ever since the Armistice, has been to endeavour to solve our economic and social problems by the outpouring of public money. Whether it be social services, our roads, housing, or anything which interests this House, the one solution which has been adopted by all Governments has been to pour out public
money to solve this or that particular question. We have had this going on for 13 years, and what is the result?
I suggest that one reason for 2,500,000 people being out of work to-day is that all parties in this House have spent larger sums of national money than the nation could afford. I know that it is difficult to draw in in any quarter, but this large outpouring of public money has made capital scarce. The hon. Member for East Aberdeen referred to that matter. Even the Chancellor of the Exchequer told us this afternoon that he had hopes at one time, no doubt during recent months, of some large conversion loan, but that the international situation and the Money Market had caused him to delay endeavouring to convert the War Stock and other stock. This large outpouring of public money has made capital scarce and, therefore, made the rates of interest high. Our manufacturers to-day, through this policy, are having to pay much larger sums than the manufacturers in France and America, and by so doing unemployment is created. My appeal, therefore, is that if the Government find it necessary during the course of the coming months to invite the co-operation of all parties to cut down expenditure in this direction or that direction, I, for one, will support them in every effort they may make to maintain the credit of Great Britain.

Mr. AMERY: If time allowed I should be very much tempted to follow some of the economic arguments with which the hon. Member for Greenock (Sir G. Collins) began his speech. I should feel disposed to say that a deflation which reduces the price of raw material and foodstuffs in terms of our currency does not necessarily reduce their price in the terms of the goods and services with which we have to pay for them. I might also say that a great fall in wholesale prices is of little help to a manufacturing and exporting country unless it is also accompanied by a corresponding fall in the overhead charges of the nation and in the wages of its citizens. The last of those contingencies, at any rate, is not one which we should desire to advocate or encourage. Let me turn from the speech of the hon. Member to that of the Chancellor of the Exchequer. It was a very curious and interesting speech, a great part of which might be summed up in
the one word "peccavi"—I confess I have been wrong. Six or seven times in succession the Chancellor of the Exchequer used the words "confess" and "confusion" with regard to errors in his calculations. But on an occasion like this, like my right hon. Friend who opened this Debate, we are not out to make party scores, but rather to see what we can contribute to the common cause in a very grave emergency. From that point of view, the part of the speech of the Chancellor of the Exchequer which is of most interest and which we most welcomed was the very definite and explicit assurances which he gave to the House of his conviction that it is absolutely essential that we should have a balanced Budget, and the announcement of his determination that he would make every possible effort to make next year's Budget balance, however disagreeable the consequences of that necessity might be.
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We also welcome his statement that the Government will take the report of the Economy Committee into most serious consideration and come back with their proposals to this House. It is true that he added that no Government without a clear majority of its own could put forward far-reaching, drastic and unpopular proposals for the reduction of expenditure, and suggested that the responsibility must in large measure lie with the House itself. Certainly, the responsibility is for the House, if the Government take the responsibility of producing their proposals, and, as far as our part of that responsibility is concerned, we on this side will not be found wanting. I hope it is not introducing in any sense a partisan note into these discussions to suggest that we cannot be always too sure of the hopes that are held out. More than once before we have found the Chancellor of the Exchequer a watchdog who only growls after the burglars have left the house. We cannot help remembering that the critical three months, during which the Government have to make up their mind on policies which are going to affect the whole existence of this country, are also a period in which they are going to meet their own supporters in party conferences, and we may well have some mis-
givings as to what the tone of the Chancellor of the Exchequer will be when they come back from those discussions. We fear we may well quote against him the words of the Latin poet, video meliora proboque, deteriora sequor—" I really agree with Chamberlain, but I shall reluctantly vote with Lansbury."
I agree with the hon. Member for Greenock that the problem with which we are faced is a problem which, while it may have been seriously aggravated by the present Government, is not entirely their creation. This problem is one which has been growing, not only for the last 13 years, to which the right hon. Gentleman referred, but for something like two generations. We are carrying on a financial system, which, in the great days of the financiers of the mid-Victorian period and of Chancellors of the Exchequer like Gladstone, was based on the principle of taxation for revenue only.

Mr. SPEAKER: We cannot discuss taxation on this Bill.

Mr. AMERY: I shall not discuss the merits of their taxation. I shall only say that the principle on which their taxation was based, that of not interfering one way or another with conditions of trade, was in its turn based on a great fundamental assumption as to the total expenditure. It was based on the assumption that expenditure was so low that it could not produce damaging incidental effects on the industrial structure of the nation. Those were the days of "peace, retrenchment, and no social reform"—at any rate, no social reform in the sense in which that word is used now. Those were the days—I take the period in the middle of the sixties—when the total Budget of this country varied between £60,000,000 and £70,000,000. Even as late as 1891 Lord Randolph Churchill resigned sooner than make himself responsible for a Budget of £91,000,000. By the time the Great War opened the Budget of this country had practically reached £200,000,000. If you take the total burden of expenditure, the tax burden in the Budget and the burden in local rates and social insurances, it had reached over £250,000,000 at the outbreak of war. Then came the Great War. By 1920–21 that figure had risen from £250,000,000 to over £1,300,000,000. However, in considering
that figure, we must not overlook the fact that, owing to the immense increase in wholesale prices, that Budget was not five times the burden of the Budget of 1913–14 but, in fact, only some 70 per cent. higher.
The really serious situation, with which we are confronted, is not the addition to our burdens caused by the late War, but the addition imposed since the War. For that two causes have been responsible, the policy of deflation consistently followed by a series of Governments and the pathetic belief, as the hon. Member truly said, that we can solve all our social and economic problems not by going to the root of the question of production but by the expenditure of public money. On that many of us on both sides of the House are agreed—even though our solutions may be different—that the mere expenditure of public money is not a solution of the fundamental difficulties. What have been the result of those two policies in conjunction? By 1924–25 our Budget expenditure had nominally gone down by some £400,000,000, but in fact it was 30 per cent. heavier than the Budget expenditure in this country in 1920–21. Since then to our own policy of deflation has been super-added the immense breakdown of world prices in the last two years. With the £60,000,000 or £70,000,000 of expenditure which the present Government have piled on, we have a total burden to the nation, in one way and another in rates, taxes, and insurance levies, of over £1,000,000,000, a burden two and a-half times as great as the burden which this country was carrying at the end of the Great War, four times as great as the burden we were carrying when the War began.
It is impossible to consider that a burden of that character cannot have an effect on the cost of production and, therefore, on the whole industrial life of the nation. It has an effect which must obviously arise in two directions. One direction is that to which my right hon. Friend referred in his opening speech, the effect of that burden of taxation in withdrawing from industry the capital required to sustain employment. The calculations to which he referred show that in the last 12 years over £1,600,000,000 has been withdrawn by taxation from industrial capital. On the
assumption that it takes some £500 of capital to employ a man, that means that, other things being equal, there would be 3,360,000 places less. If we have only unemployed to the extent of 2,600,000, that suggests that other sources of energy and recuperation have helped to make good the gap in the national capital created by over-taxation. The other direction in which taxation must have its effect on industrial production is the inevitable fact that taxation gets passed on. It was assumed once upon a time that our taxation was of a type which did not get carried on. Income Tax was levied on profits, and therefore only paid after profits were earned, and so, it was argued, it did not affect the cost of production. Our consumption taxes were optional, it was said, and, as wages were fixed by the subsistence level, only the workman who could afford it could indulge in beer, tobacco, and other luxuries. All that has been changed both by the volume of taxation and by the different attitude and conditions of our industrial life. To-day it is not subsistence but standard of living which occupies the whole outlook of the working-classes of this country.

Mr. MUGGERIDGE: It is more civilised.

Mr. AMERY: I agree it is more civilised. It is an outlook which has behind it the tremendous organising power of the trade union movement, though even they cannot fight irresistible world forces without the support of Parliament and of the Government of this country. The standard of living does not apply to the working-classes only. The shopkeeper, the professional man, right through the whole scale the national tendency is to try and maintain the same conditions, and, if you have to pay more, whether in rates or taxes, to pass it on in the cost of the goods you sell or of the services you render. To say that, as a matter of theory, the rate is a tax which is passed on because it is levied irrespective of profits and that Income Tax is not passed on because it is only levied after you have made profits, is an argument which does not correspond with the real situation in industry to-day. From those causes, the cumulative action of rates, taxes and insurance levies, passed on by workmen into the wages
which they naturally demand, passed on through those wages into the cost of every article produced and every article used for production including the cost of the construction of the factory, all these things must enter into the cost of production and constitute, in fact, to-day a very heavy veiled excise on British production, which was never contemplated when our present fiscal system was inaugurated. It is not my purpose to-night to suggest legislation altering the system and levelling our taxation as between goods brought into the country and goods produced in the country. For my purpose, it is sufficient to deal with the consequence of a situation in which the whole volume of our taxation creates a veiled excise upon British production, which is not balanced—

Mr. SPEAKER: That is a subtle way of getting round it. We must not discuss the question of taxation on the Appropriation Bill.

Mr. AMERY: I thought I was at any rate in order, in dealing with the broad effects of our expenditure, to show how it involved a burden on production. Certainly I have no intention of transgressing your Ruling or of going further than to point to the vicious circle of increasingly higher expenditure involved by the methods by which we are endeavouring at present to remedy the situation thus created. That brings me to the immense increase in expenditure on what is broadly called social reform in this country. I should like to draw a distinction between two types of social reform. There is that type of social reform which is concerned with doing things for the community which cannot be equally well done by the individuals themselves. I think that, without distinction of party, we believe in this House that a system of education—universal, compulsory, free—is a thing of value to the nation and repays itself. I think we believe that expenditure on a health policy—and no one believes it more than my right hon. Friend the Member for Edgbaston (Mr. Chamberlain) at my side—which can resolutely stamp out the scourges of infantile mortality, tuberculosis, and venereal disease is expenditure of a developmental character, and I do not think that anyone wishes
to reduce development in these directions.
On the other hand, we are dealing also with a very large field, and the most expensive field in recent years, of what is called social reform but is largely remedial or eleemosynary reform, aimed at coping with the results of poverty and unemployment. I am convinced—and surely the experience of the last few years has proved it—that that is not the way to deal with that particular problem. The right method is not to deal with poverty after it is created or with unemployment after it is created, but to try to create conditions under which employment will be available, and employment at a reasonable standard of wages. The hon. Member for East Leicester (Mr. Wise), in his interesting speech, suggested that the amount of money that has been spent on unemployment relief and in other kindred ways was a great steadying factor in the internal consumption and production of this country. It may have had that effect to some extent, but how much greater would the steadying factor have been if those people had been earning wages instead of subsisting on unemployment benefit!

On this question of employment and the policy which has been pursued hitherto in this matter, I would like to make one brief observation. There are three types of employment, if I may use broad classifications. There is the employment in making goods which enter into immediate consumption or in rendering immediate services; there is the employment in building the factories and ships which enable the goods to be made and those services to be rendered; and there is the employment in what might be called improving the general plant of the community, its public works, its roads, and other institutions of a national character. Of those three forms of employment, the first, naturally and necessarily, always employs a much larger proportion of the population and gives far more employment for the amount of money spent upon it, because it is continually replacing the capital used in it as the services are rendered or the goods sold. That same process takes place somewhat more slowly when you consider employment upon building a
factory or a steamship, but it is infinitely slower, and more uncertain in many cases, when you are dealing with employment on roads, public works, and other services which yield no direct return, though they may in a general sense improve the efficiency of the community. Those in any case can only offer a very small quota of the total employment, and to try to increase that quota by State action and State expenditure, while it may be desirable in an emergency, can only help the situation to a very small extent and at a very heavy cost, a cost which may seriously prejudice employment in other directions.

I submit that over these last 10 years we have carried that policy to the utmost lengths to which it is capable of yielding results, and that we must turn to other methods. Our criticism of the Government is that in regard to those other methods, those methods for creating employment by dealing directly with the production of goods, by creating a demand on the part of the purchaser who is the only ultimate employer, on that side the Government have done nothing or practically nothing. I do not wish to follow up that aspect of the question, but I say that the main criticism upon which we, on this side of the House, concentrate is that over the whole field of domestic, Imperial, and foreign policy, there has been no sign of any clear realisation on the part of the Government that the methods which they have been pursuing are hopelessly inadequate or that there is any intention of embarking upon any line of policy, Socialist, Protectionist, or whatever you like, of bringing about some result which will to some extent bridge the yawning chasm in the national finances. Our criticism is that on neither line do they approach it, neither by administrative economy nor by constructive policy, and both are essential to deal with the situation at the present moment.

If I may turn for a moment from that to another aspect of our situation, of course it is true, and nobody will deny it, that our difficulties in the last year or two have been greatly aggravated by world causes and that other countries have suffered, too; but really, to compare our financial situation—the Budget prospects of next year, on top of the over-taxation from which this country is
suffering and the critical state of our industry—with the Budget of the United States of America, which in recent years has again and again lowered its taxes and has plenty of elasticity with which to make good, surely that is not a really fair comparison. In any case, while it is true that we are dealing in a large measure with world causes and that a complete solution of those difficulties may perhaps only be obtainable by international action, that is no excuse for not taking action within our own sphere, within this nation, within the Empire. Nor, as a matter of fact, is it untrue that even these world causes are beyond our power to influence. I believe that in this whole world situation, as more than a century ago, England can save herself by her exertions and the world by her example.

Let me take some of these world causes. Take, for instance, that tremendously grave problem to which my hon. Friend the Member for East Aberdeen (Mr. Boothby) referred in his extraordinarily interesting speech, and to which the hon. Member for East Leicester also referred, namely, the terrible devaluation of all prices during the last few years, as a result both of the underproduction and of the dislocation of gold in the world. I need not labour that point. It is the whole basis of the report of the Macmillan Commission, and in that report the figures that they give indicate a situation even graver than the language of the report itself. They point out that in the last two years the gold of the debtor countries has been transferred to the creditor countries at the rate of some £70,000,000 a year, while barely £500,000,000 are left in those debtor countries as the basis of all their currency systems as well as the means of payment. But since that report was written the situation has changed very seriously. The report of the Midland Bank a week or two ago shows that in the last 18 months the flow of gold to the two main creditor countries, America and France, has been at the rate of £160,000,000 a year, and we have known something about a flow of gold at the rate of £15,000,000 a week in the last few days.

That situation cannot be subject to any complete treatment by any one method. The remission or the readjustment of
international debts can only be handled internationally. It may be that only international action among bankers can secure a generally better redistribution of gold. But among the factors upon which they have laid stress in this very context is the tariff policy of other countries and the large positive trade balance of countries like the United States and France, a trade balance which must be paid for in gold, unless they send it back by reinvestment; and their investment policy is not continuous or steady enough to give us much hope of that. The obverse of that favourable trade balance in those two great countries is our immensely unfavourable trade balance. If we can do something to set our trade balance right, we shall at once secure a state of affairs in which the gold, of which we are the original proprietors, but which is at present sterilised and buried, would be available in this country for British finance, with its wide outlook, to distribute and irrigate over the world.

If I may say a word on a subject on which my hon. Friend the Member for East Aberdeen touched, it is this: While by our policy or want of policy, we have allowed debts to be doubled in the West, in the last three years we have halved and more than halved the purchasing power of the peoples of the East. Surely there again we have a subject which deserves consideration, whether national or international action can be taken. The other day I heard the Secretary of State for India, in defending the case of the Government against the charge of having been negligent in dealing with the boycott in India, give a whole series of figures calculated to show how seriously the purchasing power of India had fallen, and how serious was the competition from cheap Japanese goods driven out of the Chinese market by the poverty of China. I do not know that his speech was a justification against the particular charge which he was then meeting, but it is a very significant fact that underlying all the political trouble in India has been the tremendous losses of the people in India in the last few years, losses that affect us not only as sellers of goods to them, but also as guarantors, and explicit guarantors since the recent announcement by the Prime Minister, of the stability of the rupee, of Indian
finance. There, again, in a matter where probably very small efforts relatively would make a considerable difference, we ought to sit down and consider whether on the national or imperial plane, or on the international plane, we cannot do something to help ourselves. I do not wish to pursue these points further.

I have dwelt, naturally, upon the grave difficulties of our situation and the disasters which may come upon us unless we change the whole spirit and course of our national policy. I recognise to the full the immense assets which we still possess as a nation, the stability of our whole political system, the capacity and thoroughness of our workmen, the enterprise of our manufacturers, and certainly not least that wonderful mechanism of international finance, which is centred in the great City of London. But if we are to make use of these assets we want a completely new outlook, a new grasp of our affairs. The whole scheme of our national policy needs reconsideration, both from the purely administrative point of view and from the point of view of policy, and above all from the very difficult and highly debatable ground of social reform; whether the right remedy is not an extension of public relief but in obviating the need for it. A new policy of planning, organisation and rationalisation, is needed, and needed first on the national scale, then on the imperial scale, and, as far as it can be obtained, on the international scale, but for such a policy we must get away from old traditions and old prejudices of whatever kind they may be and face the new conditions of a new world with a forward view.

Major CHURCH: During the course of this Debate we have had speeches delivered from all quarters of the House, but I have not yet discerned any desire on the part of any hon. Member to implement the suggestions which have been made outside this House that there should be any substantial reduction in the wages and standard of living in the country. That policy is not one which would find favour with any party in this House, because we are perfectly convinced, from our experience of the last few years that it would be suicidal. I am not suggesting that there are not individuals who have advocated a policy of drastic cuts in wages and in the expenditure on
various services, but the House, if it were given a free vote, would pause and reflect upon what has happened in countries which have adopted such a policy. Since we have been threatened by various committees with substantial economies, and since we have been informed that some of the economies may take the form of cuts in the wages of civil servants and others, may I say something about the situation which has arisen in Germany? Germany is a country which has gone through a phase which it is suggested we should follows A new Government was formed in Germany at the end of 1930, with a new man, Dr. Bruening, who was given virtual powers of a dictator by the President of Germany.
One of the first things with which his Government was faced was the need of balancing the Budget, and the first thing he thought of in order to balance his Budget was to reduce the wages of a class of people who were more easily got at than any other, that is to say, the civil servants and municipal employés. A drastic cut was made in the salaries of all civil servants, whilst Ministers suffered even more severely. There was a general reduction in the wages on the railways, followed by a cut in wages in the metal trades, and this policy has gone on ever since. At the present time the general level of wages in Germany is probably 30 per cent. lower than it was in 1930, and the general drop in the wage level of the working classes has corresponded to a general fall in the price level of commodity prices throughout the world. But when you have reduced wages with the object of balancing your Budget you can only justify that reduction if you are successful in balancing your Budget and, unfortunately, the result in Germany is that there has been no such balancing. Side by side with a reduction in wages there has been an increase of taxation. A number of articles not previously taxed have been taxed, and on a number of articles the tax has been increased. A heavier tax has been put on coffee and on beer, and a still heavier tax on tobacco. Taxation has gone up at the same time as salaries and wages have come down, and the Budget position is worse than it was before.
The law of diminishing returns has operated most successfully in that unfortunate country, which is faced with an ever-diminishing yield of taxation, in spite of the fact that the taxes have been increased. And one must remember that in Germany the income tax assessability starts at £70 a year. All sorts of new taxes have been devised to meet the situation and to restore financial stability, but, in spite of all this, the people of Germany seem resolutely determined not to buy the things they cannot afford. The consequence is that the internal trade of the country has suffered, and the budgetary position is considerably worse than it was when the new taxes were devised and a general cut made in wages and salaries.
The natural corollary of a drastic cut in wages is a general discontent among the people, and if there is one fact more responsible than another for the present disturbed position of Germany it is the drastic reduction made in the standard of living of the people. You have a party which in 1929 only returned 10 members to the Reichstag, a year later, in November, 1930, returning 107 members; that is the extreme party, the Hitlerites, or the Nazi. Its voting strength has increased from 600,000 to over 6,000,000! a considerable increase, and some indication of the great discontent among what may be called the middle and lower professional classes in Germany. At the same time you have a vast increase in the Communist vote, which has gone up to over 4,000,000, whilst there has been no increase in the social democratic vote. That has been the logical consequence of trying to reduce the standard of living in Germany; the disinherited and dispossessed classes have become Nazis, whilst the working people and the industrialists, who have been hit the hardest by wage reductions and unemployment, have swung over to the extreme left.
I am not suggesting that if we carry out the same policy the people of this country will go in the same direction, but one must assume the danger of people getting discontented and being prepared to fly to any remedy. But what has been a further result of the political discontent and unrest in Germany? It has been a loss to the eredit of the country.
All these factors have accumulated on this unfortunate country because it has followed out a policy which seems to be advocated by every advocate of economy in this country. All I would suggest is that it is about time we ceased to think in terms of economy of that kind, and adopted the valuable suggestions made by the hon. Member for East Leicester (Mr. Wise) and the hon. Member for Aberdeen (Mr. Boothby) and started thinking in terms of a reorganisation of the banking system of this country and of currency and finance generally.
One hears it very often said that psychology is all important. With all due deference to the fears of the financial community one would like to know whether there is any rational reason for the complete panic that exists at the present time. When I was in Germany, three weeks ago, I found that the whole banking community were panicky, and that the bankers seemed to be subscribing to the general panic. I asked myself, why this sudden collapse of faith in what is virtually the strongest Government which Germany has had since the War? Why has there been any panic amongst the bankers and financial community in the City of London? Apparently there has been or the Chancellor of the Exchequer would not have had to reassure the world that the credit of this country stood as high as ever it did. The credit position of Germany stands as high as ever it did, or it should, because there is nothing radically wrong with the German people or with the people of this country. I assume that there is something radically wrong with the psychology of the financiers and bankers of the world.

Mr. W. S. MORRISON: The hon. Member for Wandsworth Central (Major Church) will excuse me if I do not follow him in his interesting observations regarding the course of events in Germany, but I would like to make this remark, that both the hon. Member for Wandsworth Central and the hon. Member for Leicester, East (Mr. Wise) left out of account altogether, in discussing the difficulties of Germany, the experience which that country went through when its currency was inflated to a degree never before witnessed in
European history since the French Revolution. It appears to me that to some extent to-day the difficulties in Germany are created by the lack of faith of Germans in their own currency—a lack of faith which was created when the inflation took place. I mention the matter now because it may have some bearing on our discussion when hon. Members are talking of our own monetary problems. It is a very difficult question, and I do not propose to dogmatise upon it. It appears to me that if you start to tamper with the value of your currency, you are immediately in danger of having exchanges fluctuating in a violent manner, and to a country which does such a large world trade as we do, that is a danger which has to be taken into account very seriously before adopting any scheme for altering the basis of our currency. The causes of our depression lie far deeper than mere currency matters. Mere currency reform, though there is great scope in it, seems to me to be merely playing with the surface of the question.
I do not propose to discuss the condition of Germany, but to take advantage of this very rare opportunity to say a word or two about the condition or our own country. It is remarkable that opportunities for discussing these matters are so rare. This country has never had an easy time, and I think that if anyone were to read the past reports of our Parliamentary Debates, they would say that, broadly, there was some relation between what was discussed in those Debates and the events that were going on in the country at the same time. But I defy any future historian to make an accurate picture of what has been happening in our country from a study of our Parliamentary Debates during the past Session, unsupported by other material. He might be pardoned for thinking that we were very prosperous, because we have been able in the last two years to raise the taxation of our citizens by 30s. a head. He might be pardoned for thinking that we were free from real difficulties, because we can waste so much time discussing academic questions, such as the way in which people should vote. He might be pardoned for thinking, from our Parliamentary Debates, that no pressing and immediate financial problem
troubled us, because we could give up practically the whole of our financial discussions this year to discussion of a tax which is not to come into operation for two years and which during that period is going to cast an additional burden on the Exchequer.
But, unfortunately for our reputation, there are other materials which will be at the disposal of any future historian. There will be the trade returns, showing a very serious shrinkage in our exporting power, while at the same time the volume of imports into this country has been such that our trade position does not put us in a position to pay for them. There are the figures of unemployment, of agriculture, which show that at this time that old industry is going through a crisis more severe than the oldest man in it remembers. There are these matters, together with incidents of works closing down and other things, which will lead any historian to see that our times are by no means as rosy or as free from difficulty as our Debates in this House, unsupported by other testimony, might lead the historian to imagine.
We have had to-day from the Chancellor of the Exchequer a very grave speech on a very important subject. In itself a warning about the condition of the country and the steps necessary to meet it, it is bound to do good if it is followed by action. But these repeated cries of alarm, unless they are followed by action, can do nothing but harm. We have had them before. We had a speech of almost the same character from the right hon. Gentleman on a previous occasion. But nothing was done. The right hon. Gentleman and those outposts of his, the innumerable committees created by this Government, have been giving cries of alarm about our impending dissolution unless we take certain steps. But nothing has been done. There has been all the alarm, but none of that healthy reaction to the alarm, no call to the nation to summon up its blood and stiffen its sinews to meet the emergency. If on this occasion this grave utterance is to pass without anything being done, our condition will be deteriorated by it; but if, on the other hand, it is a prelude to some definite effort to call the nation's energies together to meet the danger, it can do nothing but good.
I think there are many Members in all parts of the House who, while realising the unpopularity and difficulty of such steps as may be necessary, will be prepared to support the Government if they bring forward well chosen measures of economy. There is one economy which has often appeared to me to be possible. It seems to me that we are spending, or urging our local authorities to spend, far too much money on roads. It made one wonder a little when last Friday, up in the Lothians of Scotland, the shale industry, one of our only national sources of oil supply, was forced to close down and to dismiss 2,000 workmen, while at the same time local authorities are spending vast sums on roads which no one but those fortunate enough to own high speed motor cars is ever likely to use. In that direction we have gone too far; we have spent too much; we have overburdened our people with a toll to pay for a necessity which is not important enough to warrant the capital and the recurring expenditure upon it.
We are now going to part for a holiday which I hope has been well earned, and during that period no legislation can be passed. So it is fitting that a Debate of this character, in which legislation cannot be discussed, should come at the end of the Session. But during the Recess no doubt there will be speeches and gestures made by all parties to their supporters. There are two matters which I would urge upon the Government with great respect as the sort of gesture which they might make during the vacation in order to restore some part of that confidence upon which our prosperity as a nation depends. The first is the matter that I have mentioned, a real determination to pursue the path of wise control of expenditure. The other is to try to get rid of a feeling which is spreading throughout the country, and the trading community in particular, that the Government is not considering enough the changed conditions which confront us as a nation. Reference to this subject has been made by speakers from all parts of the House.
Attention has been drawn to the greatly changed conditions in which we as a nation are placed to-day, and to the feeling, which gives rise to a lack of confidence, that the Government are as bound to 19th-century methods of considering our whole system—I do not refer to any
particular part of it—as a tramcar is bound to its rails. It appears that it can only clank and jolt along ways that were laid down when this country was a very different factor in world trade. They jolt along, they occasionally stop to pick up a few passengers from hon. Members on the Liberal benches; they sometimes stop to put down a few, represented by the hon. Baronet the Member for Smethwick (Sir O. Mosley), who hurry off with every sign of having had an uncomfortable journey. So they go on, still held as fast to an out-of-date conception of our country as a tramcar, an obsolete vehicle, is held to its rails.
If the Prime Minister, that master of gesture who has made so many telling gestures to foreign nations, could make a gesture to the people of this country to the effect that he and the Government realise that we are living in times very different from old times, and that, to continue the metaphor, he is prepared to try to take an omnibus, a more elastic method of progression than the old tram, I think there would be fresh hope in the country, a hope sadly lacking now. Those are matters which must be left for the Government to decide. But as regards long-range affairs it appears to me that a great part of our distresses at the present time result from a sort of gamble played last century which did not quite "come off." We did that when we set out to be a country entirely dependent on foreign trade, a country that could neglect its agriculture with immunity so long as it could command markets abroad which would supply it with the means of buying food from foreign countries. That stage in our development has passed and passed for ever. Unless we set about conserving our own native resources as a nation, we shall not see those happy times which we all hope will follow for this country.
When we talk about the state of agriculture now, let no one imagine that it is the ordinary grievance of agriculture which comes up at various times. I can tell the House that this harvest the farmers, the smallholders and the market gardeners, are faced with a situation of unparalleled difficulty, that in many cases they have not the wages to pay the workers in the harvest, and that there will be thousands of agricultural labourers
thrown out of work this autumn and winter unless something is done. I know that at this moment we cannot discuss what ought to be done. But again I think that a great part of the difficulty of the agricultural industry to-day arises from the way in which it seems to be denied all prospect of relief for present necessities. True we have had the Government's contribution towards the agricultural problem. It seems to me to suffer from one defect, which runs throughout.
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You have them, for example, providing more council houses, when what is wanted is really some money to put old houses into a habitable condition. You have them envisaging great plans for settling more men on the land, when what is really wanted is that the men now on the land shall have a chance of making a livelihood. You have them producing plans for reclaiming areas of land now not under cultivation, when what is wanted is to give the land under cultivation some chance of returning a livelihood to those who labour upon it. It has been called a far-seeing policy. But I cannot think that it is far-seeing, except in the sense that it shuts its eyes to what is near. I cannot think that it is a bold policy with regard to anything except a fictitious future. As to the present needs of the industry it is completely timid and lacking in any grip or relevance. If we could revive the balance of this nation we should get in the agricultural community a large purchasing power for our own commodities which would react in the most favourable manner upon our industrial community. We talk about giving credits to Russia and other hostile places. Why should we not try and develop our own native estate? As regards the future policy of this country, if we are to avoid those distresses which we have lately suffered, we must take that course which the ordinary man who is in difficulties takes when he finds foreign resources departing, when he is let down by allies and reserves abroad, which he thought were safe. The ordinary man in those circumstances tries to re-establish his own spirit and to recreate his own energies. If we, as a nation, adopted a policy of this kind, we should see arise
a country which would be more stable, more civilised and happier than the one we are in to-day.

Captain CAZALET: As I represent a constituency which is a near neighbour of the constituency of the last speaker, may I say that I heartily endorse every word that he said in his interesting speech in regard to the agricultural industry in that part of England? I want to make a few observations on one aspect which has been touched upon to-day, namely, the monetary position. As an ordinary member of the public, not a financier or economist, trying to find a solution for our present difficulties one looks for some lead towards the eminent economists and professors who make pronouncements on these matters. I have studied with some care and diligence the weighty report of the Macmillan Committee. My observation upon that report is, that when one finds in it some definite recommendation, one thinks: "Here is one solution for the existing problem," and then one reads further, in order to find enlightenment on the subject. What happens? One finds arguments against pursuing the very course which has been recommended a few pages earlier. In fact, if one continues to read the volume one finds a recommendation by one or more members of the committee, saying that in this or that respect they cannot join with their colleagues in suggesting it as a solution for the particular problem. No doubt next Session we shall hear from the Government what course they intend to adopt and what proposals they intend to present to the House in relation to the report. All I can say is, that the report should give hon. Members every reason, pro and con, for defending or attacking whatever suggestions the Government adopt.
We have heard to-day and at various times that gold, or the mis-use of gold, or the lack of gold, or the plethora of silver are the chief causes of the economic position in which we find ourselves today. We have heard that the world's volume of production increases each year between two and three per cent., and we find that the gold supply is increased by 2 per cent. every year, but when we take into consideration the fact that France in the last two years has absorbed the whole of that 2 per cent. increase of
gold and more besides, it is obvious that the gold factor has played a very significant part in dictating the prices of commodities that rule to-day. In the United States of America there are £890,000,000 of gold, in France £450,000,000 and in this country, always considered to be the banking and financial centre of the world, only £130,000,000. That illustrates the point that the mal-distribution of gold has played no insignificant part in producing the present economic crisis.
A group of individuals, headed by Lord D'Abernon, believe that the crisis could be remedied almost in its entirety by a change in the monetary system. They argue that commodities in the last few years have fallen, while gold has appreciated. The position is put very concisely in one sentence by Lord D'Abernon, when he says:
The gold standard of the world has become unstable. If it had so happened that the world had chosen wheat or copper or cotton as the standard of value in the place of gold, instead of commenting on the disastrous fall in prices, we might be endeavouring to explain the remarkable stability of price of the main articles of consumption. Compared with one another, the wholesale prices of individual commodities have altered comparatively little—all have been out in the rain together: what has altered in the last five years is the purchasing power of gold.
I have no desire to stress that point, which has been made this afternoon. Those who support this policy say that it is a simple matter, that there is no crisis at all and that it simply means that we have to change our monetary system. If it was as simple a matter as that, I could not believe that some further steps would not have been taken to introduce the necessary reform. Any action along those lines, to be effective, must be taken not by this country alone, but on an international basis. Whenever we have to take international action, as we have seen in the last few weeks, there are always innumerable difficulties put in the way of arriving at a common solution. One reason for the mal-distribution of gold is to be found in the artificial payments of gold from one country to another in the form of reparations of War debts. If we are to solve the world problem, especially the European problem, the United States of America will have to face the question of War Debts,
and France will have to face the question of reparations. If it were possible for America to extend the Hoover scheme for five years, I believe that alone would do more to remedy the situation in Europe and restore confidence than any action in regard to gold or silver or any other commodity that we might take.
In regard to silver, Professor Dampier Whetham, of Cambridge, recently put forward his views, and I have not yet heard from the Government or from any financial expert any really cogent argument against his suggestion. Professor Dampier Whetham is not a bimetallist. I have always held the view that you must have one standard or the other. His scheme is briefly this, that we should arrange with the United States of America to pay a portion of our debt to them in silver at the market price of silver, and that the country to which we paid the silver, whether the United States or some other country, could use that silver in the open market to buy gold. By these means you would appreciate the value of silver. That scheme is supported by very eminent economists, and one would like the official view of the Treasury upon it. I believe it to be within the realms of possibility that the silver producing countries, India, Mexico and the United States, could get together and control, if not the amount of silver they produced, at any rate the amount of silver that they sell. I do not think any further argument of mine is needed to demonstrate what an incalculable benefit it would be to this country, to the United States and to the whole world if we could do something to stabilise silver.
I should like to refer to one point which was put forward by the hon. Member for East Aberdeen (Mr. Boothby) in his extremely interesting speech. Some people argue that the economic problem is the result of overproduction. The hon. Member for East Aberdeen asks how there can be overproduction if millions of people in various parts of the world are to-day without the necessary articles that they require. In this matter there is a slight confusion of thought. In my opinion there has been and is to-day no overproduction of manufactured articles, but
there is over-production of certain primary commodities—wheat, tin, rubber, and until we can find some new nation, or until we can educate, say, 400,000,000 Chinese to consume wheat instead of rice, the supply of wheat produced in the world to-day will be more than can be consumed by those people who eat wheat. In regard to rubber production, it was thought that when we increased our supplies of rubber, new methods, new inventions would be found for using the rubber. They have not been found. Consequently, we have overproduction in these various commodities.
This follows, that the number of people who are engaged in producing primary products and commodities, on the most conservative basis, outnumber by 10 to one those who produce manufactured articles. Therefore, it is obvious that when you have got a large proportion of the population of the world engaged in producing primary products, and unable to produce those products to sell at a' profit, if they are able to sell them at all, the majority of the markets of the world are closed or very strictly rationed and limited. We in this country are particularly interested in this matter. The Macmillan report points out that one-third of the workers in this country are directly depending for their livelihood and wages upon exports. Exports? To what countries? To those countries that produce those primary products. Therefore, it is obvious that until that situation is remedied there will not be much improvement in the state of trade and industry in this country.
We have seen in the last few days that the Bank of England is thinking of negotiating with the Bank of France for a loan of £20,000,000. The Chancellor of the Exchequer in his speech today emphasised the gravity of the situation. I cannot think of anything that brings home the economic crisis which is pressing in this country more than the fact that we, who have prided ourselves on being the bankers of the world, the financial centre of the world, are at this moment being put in the position of trying to borrow £20,000,000 from a country 65 per cent. of whose debt to us we have remitted, and a country who has depreciated its currency by 75 or 80 per cent., to the great cost of innumerable people
in this country. I understand that when there is a great drain of export gold from this country the usual method is to put up the Bank rate. As I understand it, the process works like this, in regard to your exports, visible and invisible, that once the Bank rate goes up you get a proportion of those exports repaid to you in the form of gold, and then the situation rights itself.
To-day it is very questionable whether our exports visible and invisible do exceed or even equal our imports. Therefore I am informed that the method of putting up the Bank rate may not, in the long run, be sufficient to-day to stem the exodus of gold from this country. I think it very deplorable that we should have arrived at this position because not only does it influence our financial position but it will also influence our political position in the future. Naturally France or America or whatever country may lend us money will lend it to us short, so that, if our views on foreign affairs should not coincide with theirs, it may well be that on some future occasion they may, as has happened in the past, squeeze us, with the result that we shall either find ourselves in a serious economic position, or have to fall into line with their political policy whatever it may be. We have already had stressed to-day unemployment and high taxation and the very high cost which our incomparable social services—described as such by the Prime Minister—entail to the country. It may be flattering to us as a nation that we have the best social services in the world, but it is a matter which has to be reckoned with when we are considering our finances and what we are able to afford to-day. We have had in the last week a true picture of the state of agriculture in many parts of the country and taking all these matters into consideration, it is obvious that the prospect is not a rosy one.
I admit that in matters of monetary reform, if anything is to be done it has to be done on international lines to be of any use, but I submit that there are other things which we can do of an internal and domestic nature. There are steps which we can take to set our own house in order. Some months ago the Chancellor of the Exchequer told us that all sections of the community would have to make sacrifices if the situation was to be met and a solution found, and he also
told us that the Cabinet would set an example to the country in making those sacrifices. We have not heard yet of any fulfilment of those suggestions. Perhaps when we read the May report to-morrow we shall find some of these sacrifices incorporated in it and I am certain that the Chancellor of the Exchequer will receive the support of Members on these benches in asking the country, as a whole, to accept whatever sacrifices may be deemed necessary.
Various speakers have stressed the fact that although the superstructure of this country may be in a difficult position, fundamentally we are still sound. We have some £4,000,000,000 of foreign loans—long-term loans, of course—but I fear that at the present moment a very large proportion of these are in the condition which is known as "frozen." Nevertheless I think that demonstrates the innate, fundamental solidity and stability of this country. I believe that we are a peculiarly adaptable and flexible people, and that we can accommodate and acclimatise ourselves to whatever conditions may be necessary to restore prosperity to industry. It is a trite saying that in the past we have won our battles because we have never known when we were beaten, but I believe that, however depressing the existing circumstances, may be we shall also win the economic battle which we are fighting to-day. I am convinced that we shall, to use a common phrase, stage such an industrial come-back as will surprise not only ourselves, but the world at large.

Sir HILTON YOUNG: I imagine that it would be no misdescription of this Debate to say that it has consisted in a request from His Majesty's Government for more rope. As the Debate has proceeded in an atmosphere of low party temperature I do not specify the cause for which that rope is required. The right hon. Gentleman the Chancellor of the Exchequer has announced that his intentions towards the report of the May Committee are honourable. It requires, of course, an act of faith for us at this time of day to have any confidence in an expression of intention on the part of His Majesty's Government, but as, in the immediate future, the opportunities for dealing with the situation will be limited by the holidays, one has to be content with that expression of intention. I should like in pass-
ing to express my surprise as regards the report of the May Committee, that its contents appear to be known to everybody except to the House of Commons.
On this occasion there is no intention at all of advertising the difficulties in which the country stands. Unfortunately they are too clear. The intention is to seek remedies, but, in order to seek remedies for those difficulties, which are all too clear, it is necessary to be very frank about their nature, and frankness demands that it should be stated, as simply and as directly as possible, that the immediate cause of the difficulties of the country at the present time is an unbalanced Budget. It is never any satisfaction to be right when you have been prophesying misfortune, but Members on this side of the House can, I think, say that they were right in calling attention, at the time of the introduction of the Budget, to the circumstance that within recent history it is the first unbalanced Budget in this country. They foretold that the effects of that Budget upon the national prosperity would be precisely what they have proved to be. The great credit crisis in which the country finds itself is the direct consequence of the circumstance that our Budget is unbalanced. Of course, in foreign countries, it is not understood that the circumstance of the unbalanced Budget is not due to any fundamental weakness in the economic state of the country. It is not understood in those countries that it is due to the spendthrift and careless policy of the present Government. They do not understand that as we understand it, and they cannot be expected to do so. As foreign onlookers they draw the natural conclusions from the circumstance that our Budget is unbalanced. The first natural consequence is the credit crisis in which we find ourselves.
However much rope we may be disposed to give the Government, surely we should not be content to separate on this occasion without a more satisfactory explanation of the measures which the Government propose to take to balance the Budget. I do not think that any Government of this country should be allowed to escape its responsibilities, under the cover of any committee, however strong that committee may be and however much hope we may build upon
its report. It appears to me deplorable that we should separate for the Parliamentary vacation in the present crisis without any account from the Government of what action it contemplates. It is not as if things were only as bad as they were when the Budget was introduced. The Budget was unbalanced when it was introduced; £20,000,000 was brought in from the Exchange Fund. That was on Capital Account. By the most sublime act of ostrich-like blindness of which a Government in this country has ever been guilty, the Government completely ignored the borrowing, at the rate of £1,000,000 a week, for unemployment insurance.
If the Budget did not balance when it was first introduced, still less does it balance now when the load of unemployment debt has gone from bad to worse, when we have added the additional burden of £10,000,000 from what we may call the Hoover action, and when we see the inevitable circumstance, which we on these benches foresaw, of gradual accumulations of Supplementary Estimates. Under these conditions, let us look a little deeper. We shall see another circumstance. The failure of the Budget to balance is no doubt the immediate cause of the present crisis, but there is a cause deeper still. It is the failure of the country as a whole to live according to its means. I say that it is no satisfaction to us on this side to be right in foretelling evil. But we did foretell precisely such a consequence as the present credit-crisis from the circumstance that at the present time the country is not producing wealth sufficient to support the standard of living that it is enjoying. It is that circumstance that is the deep-seated cause of the present trouble.
We are living on our accumulations. In order to see that this is so, it is only necessary to look at the figures of our foreign investments. They have dwindled down until they are on the point of disappearance. The connection between that and the present credit difficulties is direct. We have lost the power of controlling the credit situation given us by a strong position as regards foreign lending. That is at the bottom of those symptoms of discomfort from which we are suffering. It appears to me that there is a failure to realise our position, not only on the part of the Government,
but in the country at large. Why are we so discomposed at the circumstances of the present time as regards our relations with other creditor nations—with France and the United States? Is it not because we are now in this relation for the first time, that we are no longer preeminently the first in strength of the creditor nations of the world, that we have for the first time to deal on an equal footing with other creditor nations? The adjustments, bargains, and relations which are the result of that equality are to us strange and uncomfortable?
There is another circumstance which appears to mo to emerge clearly from this Debate, which leads one to seek to strike a slightly different note in our proceedings. In many speeches one has heard our present difficulties discussed as if they were entirely a matter of monetary factors. I believe it to be a most profound error to suppose that our difficulties at the present time are wholly monetary difficulties and the result of monetary factors only. Let me not belittle the useful work done in clearing up the present situation by the Committee that was presided over with so much ability by Lord Macmillan. It has done very good work in clearing up the situation, but the effect of it, I suggest, has been somewhat to misdirect national thought and national energy, At the present time it is indeed not the case that monetary factors alone are at the bottom of our troubles, or that the remedy that we should seek is a monetary remedy only. The argument to which one has listened to-day, and the argument which is so widespread in the country, appears to be this: The cause of all our trouble is that prices have fallen; it needs then only to raise prices by a manipulation of the currency and credit system and all will once more be well.
I believe that remedy to be precisely similar in its nature to the old device of seeking to keep the spring in by building a wall round the cuckoo. It cannot be effective for the purpose for which it is intended. It is not even contended that world prices can be raised on the international scene. The organisation of the nations of the world and the central banks of the world is inadequate for that purpose. The remedy to be applied then, if it be applied, must be to raise prices locally here in this country. How can that possibly serve any useful purpose in
the long run? In the first place, let us consider this. You cannot raise prices locally in relation to world prices without casting the value of your currency adrift from gold. You must thereby set its value vacillating as regards the values of the other currencies of the world. That would have two disastrous consequences, so evil that they would outweigh any temporary good effect that would be produced by raising prices by this means. The first would be a final shattering of the confidence of investors in their investments, and a final blow to the savings habit on which the prosperity of the nation is built up. That is the first evil consequence. The second must be that once you sot the value of our currency vacillating, as you inevitably must if you try to raise prices only locally, you produce those conditions of uncertainly as regards exchanges which makes international trade practically impossible. If we are to abandon hope of recovering prosperity in international trade, in our export trade, a prosperity which can only be secured by stable exchanges, we are abandoning hope indeed.
There are other considerations. What is the use of raising prices unless you can be sure that the costs of production are going to stay down, and what guarantee can there be, if prices are raised here locally in this country that the costs of production, and particularly of wages, are not going to rise with rising prices, so that you will arrive once more at precisely the same position in which you are now? Finally, the remedy is supposed to be this—that you would raise prices by this local action until you brought prices once more into harmony with present wages and costs of production. But what guarantee can you possibly have in this world of imperfect organisation in which we live that, when you raise prices, you are going to stop at the right point? If experience teaches us one thing, surely it teaches us that once you admit the possibility of inflation, for it is nothing else, it is perfectly impossible to stop at the theoretically justified point. You are forced onwards until you reach a measure of inflation that is agreed by ail to be disastrous in its effect upon the general prosperity of the country.
When I hear people advocate these monetary remedies for our present difficulties, I desire urgently to ask them
another question. It is this. Suppose that you carry out this alleged monetary remedy, recommended in one form or another by the Macmillan Committee and by speakers in the Debate to-day, and suppose you do so with the utmost degree of theoretical success and perfection, and suppose you stop at the right point in your inflation; suppose even that the arguments to which I referred are baseless and that those evil consequences are not involved, have you not still to consider this, a matter vital to your hopes? When you have done all this, what have you done to remove the fundamental disharmonies and dislocations which are known to be at the bottom of the lack of prosperity at the present time? After you have carried out this measure and have applied your monetary remedies, you will have the same difficulties as regards the disproportionate share which is taken out of the national earnings by the sheltered trades. You will not have done anything to remove the undue height of wages in the sheltered trades in comparison with other trades.
There is another difficulty that would still remain. After you have carried out this partial measure of inflation, just as before, you will still have one of the deepest existing causes of the present dislocation of trade, the disharmony between the prices for agricultural prime products and the prices for manufactured articles. In the view of some, a view which is entitled to much weight, that is at the very bottom of the troubles at the present time—that too much of the increase of prices which resulted from inflation during the War has been obtained by the manufacturers of manufactured articles in relation to the prime producers of agricultural and mining produce. What guarantee can you have, if you adopt these monetary remedies, that you will not be accentuating the disharmony between the two? Another of the deep-seated causes of the difficulties of the present time will still exist. I refer to it without hesitation, although it is a highly controversial matter with hon. Members opposite. You will still have the inertia of wages, which, owing to our powerful system of trade union combination, prevents wages from reacting to movements in world prices. You
will have done nothing to prevent that difficulty in the economics of the present day.
What will you have done to correct the deep-seated evils which come from the admitted abuses of our present system of unemployment insurance? We have argued before, and no doubt we shall continue to argue for some time, that one of the things that most stand in the way of trade recovery is the demobilisation of capital and labour by the abuses of the unemployment insurance system. Owing to its present method of administration it keeps labour stagnant, looking to trades from which it can never expect employment again. It keeps capital demobolised in decadent trades when the brightest hopes for the future of the country must depend upon that capital looking elsewhere for fresh employment, to new trade. Capital and labour are both demobilised by the present system of unemployment insurance. These monetary remedies, these banking remedies, these superficial palliatives will do nothing to deal with that deep-seated evil.
The next consideration, and perhaps he greatest of all, is what can you do by these palliatives, these monetary remedies, in order to correct and reform that greatest of all our evils, upon which our attack has been ceaselessly directed, and which has been so ceaselessly promoted by the action of the present Government, the deep-seated evil of over-taxation? It is the heavy burden of our taxation which, more than any other factor, is pressing us backwards in the race with our foreign competitors. This is not just a vague matter, it is not merely the disinclination of persons to pay direct taxation; it is a direct economic effect, of which you can trace the working in commercial life from day to day. By the excessive burden of taxation in this country in comparison with our foreign competitors you produce two specific evil effects. You prevent the investment of fresh capital in this country, and you drive fresh capital which might be invested here, to investment in other countries where it has an easier burden of taxation to bear. Most fatal consequence of all, you produce the general impression that effort in this country is prevented by the laws of the country from earning its due reward,
and that therefore this is the country in which it least pays to make the effort necessary to improve trade.
All these deep-seated evils are promoted from the extravagant policy of our Government. There are no remedies to be found for them in those easy paths of the manipulation of our banking system, our system of currency or our system of credit. I suggest that there is a profound error underlying much of the approach towards these question on the part of some. I must not use the phrase, "The great illusion," because that has been monopolised by a distinguished Member of this House, but let us call it "The great error." The great error, I submit, is that the great slump from which we as well as the rest of the world are suffering, is a slump due to monetary, banking and credit causes alone. What evidence is there of that? What evidence is there that trouble has been caused in the world by a deficiency of currency or credit? One may freely admit that in the latter and the aggravated stages of the great slump there has been a deficiency of currency and credit, but there is no evidence whatever that there was any such deficiency during those periods which were obviously preparing for the great slump, and in which one must look for the true causes of the slump.
Further, even now that there has come to be a deficiency of currency and credit, is it not perfectly clear that the deficiency is due not to a true deficiency of the supply of that essential raw material of industry, it is due to a lack of confidence? This is a confidence crisis, and not a currency crisis. What is amiss is not a lack of capital, that essential raw material of industry. Capital is there accumulated in deposits. But people have not the courage and confidence to use that raw material of industry. If I may say so in a Debate which has proceeded in such a low temperature of pary controversy, the confidence of the investor has been shattered by the reckless and spendthrift policy of the present Government.
We must look to harder courses than these ingenious currency expedients to find a remedy for our present difficulties. We must look right down to the basic circumstances of the time, to the deepest principles of policy, into the
deepest psychology of the national mind. I am in hearty agreement with my hon. Friend the Member for one of the Divisions of Wiltshire when he attributed the original cause of the present slump not to these banking factors but to the factors which may be conveniently summarised in the word "over-production." Over-production is due not to one circumstance but to many. It is due to the great increase in the area which has been brought under cultivation following the spread of civilisation throughout the world. I mention only the one instance of the enormous increase of culture in our Colonies and East Africa, which are now capable, in common with the Colonies in Central Africa, of producing tropical products almost sufficient to supply the world. Another area to which the same amount of attention is not directed is Manchuria, where there has been a vast increase in the production of the cheaper forms of agricultural produce owing to Japanese enterprise. That is one factor; but a factor more important, no doubt, at the present time is the improvement in the technical methods of production of agriculture and of industry, leading to a sudden flood of the goods the world desires in excess of that which it can consume. I will instance one example which happens to be known to me in my constituency. It is the example of hops. Owing to technical improvements in hop-growing, the result has been achieved that, whereas formerly about one crop of hops in every two was a failure, now every crop is a success, and the result is that there are more hops than the world knows what to do with. Other factors with which we are more interested in this House are political factors. National consciousness throughout the world has been strengthened, and this has resulted in increased national competition, which takes the form of the legislatures of the world resorting to every resource that is known to promote and increase their national production of essential commodities. If I ventured to go into the moral to be drawn from that, I should be out of order for I should have to suggest that we should do the same for our country, and I should be led into dealing with the necessity for us taking an example by the rest of the world and
making use of tariffs, in our race of competition with the rest of the world. But the matter is pertinent to my object to-day, in pointing out the principal causes of increased production.
Lastly, and by no means the least, as a factor in increasing production comes the growth of financial combinations, formed to enable producers to hold up their crops for a better market. The effect of this is strong. It reduces the effect of the old law of the elimination of the weaker producer by falling prices. That has been prevented in important cases by the defensive force of capital. Such natural causes as these are at work, causing over-production and falling prices, and thus creating the difficulties under which we labour. These natural factors underly the monetary factors. I suggest, after listening to the speeches which have been made dealing with the monetary factors, that this country will be misled if it looks for a way out of those difficulties by a monetary remedy. The causes of our difficulties are not monetary alone, and they cannot be remedied in that way by a monetary remedy alone. What action can then be taken? Let us not exaggerate what a Government can do. A Government cannot do everything, it can do something, but not much. Our complaint is that the present Government does nothing. There is one thing which a Government can do, and one thing alone of such transcendent importance in comparison with any other thing that it is hardly worth the time of any hon. Member of the Opposition to dwell upon any other thing. The Government can economise—it can avoid misleading the country by trying to make people believe that we have an unlimited reserve of capital. The Government can do the country a great service by telling the people that the present standard of living cannot be supported without earning it. That is what we demand that the Government should do. The Government should make its Budget balance, because that is the test of the self-control of the country. That should be done as an example. If the Government runs into debt and consumes more than it produces, how can you expect every householder in the country not to do the same thing? The Government can do a great service by ceasing to delude the country into the
things that it can go on supporting the present standard of living without earning it.
But what does the Government do? We are parting under circumstances which give the gravest doubts. We make no exaggerated claim of what a Government can do, but at the present time if our ship is to reach port it must have someone at the helm, and at the present time there is nobody at the helm. In regard to financial policy, at the present time the ship is steering no definite course, and there is no sign of their being any steam on the engine. When we meet again, the country will require a fulfilment of the solemn undertakings of the Government that they will deal seriously with the report of the Macmillan Committee. Then will be the time to review, at the earliest opportunity, the extreme necessities of the position, and to demand remedial action.

CIVIL SERVICE (PAY AND BONUS).

Mr. W. J. BROWN: If I do not pursue the topic dealt with by the right hon. Gentleman the Member for Sevenoaks (Sir H. Young), I hope he will not regard it as discourteous on my part, but I rise to resist the logical application of his speech in a field which is of particular concern to me, I refer to the Civil Service. There is one sentence I should like to take out of what the right hon. Gentleman the Member for Sevenoaks said as a prelude to what I have to say. The right hon. Gentleman said very rightly that the Government cannot shelter from its final responsibility behind the report of any committee or commission whatever, and that the Government must accept, the final responsibility regardless of the reports of committees or commissions. I agree with that sentence, but in a somewhat different sense. My purpose in intervening in this Debate is to request the Government to make some further statement in regard to their intention about, the Civil Service cost of living bonus before we adjourn to-morrow. In common with many other hon. Members. I have made repeated efforts to induce the Government to make a statement as to what they intend to do.
There is grave anxiety in the Civil Service. There is very grave poverty in the Civil Service. A further cut in
bonus is possible in September; the House is asked to break up to-morrow without any information as to what the Government intend to do; and we shall not re-assemble until well after the 1st September, when there may be a further cut in the Civil Service bonus. In the last resort, the Civil Service is the responsibility of this House. Civil servants have to serve political parties of all kinds—sometimes we are inclined to think that there is not much difference between them—and I believe that the desire to do the right thing by the Civil Service is not confined to any one side of this House. I believe that there will be a general desire to see that the men and women who work for us are properly and adequately treated. At the moment they are being very badly treated indeed.
The remuneration of a civil servant consists of two parts, his basic salary and his bonus. The basic salary is more or less constant; the bonus fluctuates in accordance with the cost of living; and present difficulties in the Civil Service centre upon that part of the remuneration which takes the form of cost of living bonus. The basis of the cost of living bonus in the Civil Service is a sliding scale based on the Ministry of Labour index figure. That figure is based on budgets that were collected as long ago as 1904. That is to say, the index figure is weighted, in regard to the incidence of expenditure between one thing and another, on the basis of habits of life of 27 years ago, and habits of life have changed a good deal during those 27 years. I am prepared, however, to assume, for the purposes of to-night's discussion, that that factor may be dismissed. I am prepared to assume, further, what I think is open to grave doubt, namely, that the index figure, within the area which it purport" to cover—that is to say, the area of working-class expenditure—is an accurate figure. I think it is open to doubt, but, for the purposes of to-night's argument, I am prepared to accept it as accurate.
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But, whether the figure is accurate or not in relation to manual working-class expenditure, it ceases to be accurate when you move out of the area of expenditure upon necessities of life like food and clothing and shelter, and come
into a field where services enter largely into the picture. May I put it in this way? The weighting system which underlies the index assumes that 60 per cent. of the income is spent on food, that 16 per cent. is spent on rent, that 12 per cent. is spent on clothing, that 8 per cent. is spent on fuel and light, and that 4 per cent. is spent on other items. That may be a perfectly fair distribution of expenditure in a working-class family living upon a very narrow income, but, when you enter into the professional, salaried, clerical type of labour in the Service, that weighting system ceases really to represent the situation. For example, in the ordinary Civil Service budget there are items like expenditure on education, expenditure on insurance premiums, payments for house mortgages, medical and dental services, and so forth, and of these items it is broadly true to say that they have not varied one iota in cost during the last 10 years. But during the last 10 years the cost of living index based on a working-class expenditure has gone steadily down, until to-day it is only one-third of what it was in 1921 above pre-War level. There is a further grave disability from which the Civil Service suffers. Even supposing that what I have just said about the (inapplicability of the index figure to the circumstances of any but the poorest grade of civil servants were not true, and, even supposing that the index were a perfectly satisfactory index from the point of view of the entire Service, the fact remains that the civil servant does not even get the benefit of the index figure. I should like to stress that point, because there is a very common misapprehension in the public mind that, if the index figure is, say, 60 points above pre-War level, then civil servants get a bonus representing 60 per cent. of their salaries. That simply is not the case, and, if any Member of the House has that idea in his mind, I beg that he will dismiss it, because it is not true. The fact is that we only get the full benefit of the index figure upon the first 35s. per week of salary, or the first £91 5s. per annum. On any salary between £91 5s. and £200 a year, we only get roughly one-half of the full compensa-
tion on the basis of the index figure, and on any portion of salary above £200 the percentage of compensation varies from 30 per cent. down to practically nothing when you reach the top of the scale.
That is wrong. The index figure upon which the bonus is calculated is based upon budgets that were collected in 1904, but those budgets themselves went up to about 66s. a week. In other words, the index figure purports to represent the rise in the cost of living in respect of family budgets up to 66s. a week. In these circumstances, there is no case whatever for limiting the area of full compensation in Civil Service bonus to the first 35s. of the civil servant's wage or salary. I would like to give one or two figures to illustrate this point, because it is essentially important to my purpose that the House should understand how-small is the percentage of compensation actually paid on Civil Service salaries. If the index figure stands at 55, a man with 35s. a week basic salary would get as bonus 55 per cent. of his basic salary. A man getting 45s. basic would only get as bonus 48 per cent. A man at £150 a year would get 43 per cent.; a man at £250 a year would get only 35 per cent.; and a man at £400 a year would get only 29 per cent., or roughly one-half compensation in respect of the rise in the cost of living as measured by the index figure. Because we have an inadequate bonus, and because for some years past the index figure has been coming down, and the bonus has come down with it, we have now reached a stage where the civil servant is relatively, as well as actually, badly treated by reference to comparisons with almost every other section of the community. I do not deny—I would like to make this plain—the solid advantage of security of employment; I do not deny the solid advantage of other aspects of Civil Service employment; but, in regard to this issue of bonus and inclusive remuneration, the plain truth is that we are now being worse treated than either the manual workers of the country on the one hand, or the professional workers of the country on the other. Only a fortnight or so ago, the right hon. Lady the Minister of Labour, in reply to a question in this House, gave the following information about wage levels in the manual working class as a whole. She said:
The information in my possession is insufficient to provide a basis for precise calculations, but it is estimated, from such particulars as are available, that for workpeople of corresponding grades weekly full-time rates of wages are about 70 per cent. and hourly rates of wages are about 90 to 95 per cent., on average, above the level of July, 1914. At 1st June, 1931, the average level of working-class cost of living, as indicated by the statistics compiled by the Ministry of Labour, was approximately 45 per cent. above that of July, 1914. On this basis, the average increase in 'real' rates of wages would appear to have been about 17 per cent., in the case of weekly full-time rates of wages, and between 30 and 35 per cent., in the case of hourly rates of wages."—[OFFICIAL REPORT, 2nd July, 1931: col. 1438, Vol. 254.]
I accept those figures, and they mean that, taking the working-class area as a whole, there has been a definite increase in real wages as compared with pre-War. [Interruption.] I take the figures as they are given by a Labour Minister, and they are the only figures that I have available to quote. At any rate, they do not reveal a decline in the standard of life as compared with pre-War, nor do the figures reveal a decline in the standard of life when one takes the professional classes in the country generally. If one takes doctors, lawyers, accountants and professional workers generally, one finds that wages have stabilised at anything between 70 and 150 per cent. above pre-War. If you take the civil servant, you will find that he is definitely down in standard of life as compared with pre-War.
I should like to give one or two figures to illustrate how far the process of wage reduction has gone in the Civil Service and to show the definite decline in the standard of life as compared with pre-War which has taken place. If you take a civil servant at £200 a year, you will find that there has been a definite reduction in the standard of life as compared with pre-War of about 10 per cent. For a man of £300 a year there has been a definite decline of 14½ per cent. and for a man at £400 a decline of 17 per cent. as compared with pre-War. In other words, while the standard of life of the manual working-class has at least not fallen below pre-War and, according to the Minister of Labour, has actually risen by comparison with pre-War, and while the same thing is true of professional workers generally, and while it is even more true that the standard of life of the rentier
class, by virtue of the gold standard policy, has gone up very much more than in the case of the Civil Service, you get a definite decline in the standard of life as compared with pre-War by virtue of the operation of the cost of living bonus agreement.
May I give one or two other figures? A wage of 45s. in 1921 has sunk till it is only 26s. 5d. A wage of 79s. 6d. in 1921 has sunk until it is now only 46s. 6d. A wage of 110s. in 1921 has fallen till now it is only 66s. 11d. per week. These are positively appalling reductions, and, if I am reminded, as I shall be, that the period 1920 to 1931 includes the years 1922 and 1923 when wage cuts were general in the country, I reply that there is still the same disparity if one omits those years altogether and takes the period 1924 to 1930.
May I look at that period for a moment, because it will bring out the point I am making? During the period 1924 to 1930, according to the Ministry of Labour, working-class weekly wages fell by only one point—from 100 to 99. According to Professor Bowley, who went into the same area, they fell from 100 to 98, a drop of one or two points, whichever calculation one takes as the more accurate. But during that same period, in the Civil Service a wage of £3 a week fell to £2 11s. 8d., a wage of £4 fell to £3 9s. 9d., a drop of 13 per cent., and a wage of £a a week fell to £4 8s. 2d., or 12 per cent. In other words, during a period when there was only a 1 or 2 per cent. drop in wage levels generally, the Civil Service employés with the salaries I have given experienced a percentage reduction in their remuneration of between 12 and 14 per cent.
I do not want at this stage to go into the proposals which the Civil Service made to the Royal Commission, nor do I want in any detail to discuss the recommendations which the Royal Commission has made. Whatever the merits or demerits of the Civil Service proposals to the Commission or of the recommendations of the Commission itself, it will be obvious to the whole House that these matters have got to be the subject of negotiation between the civil servants' trade union on the one hand and the Government on the other. I ought to say, in passing, that I do not regard the recommendations of the Royal Commis-
sion as offering any real basis for a settlement of the bonus issue. I say that advisedly, because the House may be under the impression that, the Royal Commission having reported on this subject, it can now go home and forget all about the Civil Service bonus and that it will come back to find it all disposed of. I think there is a very grave chance that, when the House comes back, it will find itself still confronted with the same issue—a very grave chance indeed. I say that because the recommendation of the Royal Commission, when you strip it of all its tables and statistics, really comes down to this. It takes the present expenditure upon bonus, and it redistributes it slightly so as to give a small advantage to the people earning £130 a year basic or less and a larger disadvantage to those earning £130 basic or more. In short, their recommendations represent an attempt to feed the dog with its own tail. They possess a certain amount of scriptural authority, but only in the sense of embodying the saying that to those that have shall be given and from those that have not shall be taken away even that which they have. They do not, in my view, represent a basis for settlement. But I do not want to pursue that very much further.
I am most concerned about what is going to happen between now and the time when the House comes back. The bonus comes up for review again on 1st September. The commission itself has recommended that the cost-of-living bonus shall be consolidated with basic salary on a basis which they have set out and that, if some short period after 1st September, 1931, is necessary for consideration of this recommendation before consolidation is effected, bonus should meantime be continued at the present rate. In other words, what the commission says is, "Suspend the September drop and then go on to get rid of the sliding-scale basis altogether in regard to Civil Service remuneration." The Civil Service itself is not averse from getting rid of the sliding-scale basis, provided that the terms of settlement are reasonable, but it is impossible for men to negotiate properly with the Government on the broad issue of the future regulation of Civil Service wages with the threat of a cut coming along in September. If there are to be
reasonable negotiations between the Government and the Civil Service, the first thing that is necessary is that the Government should announce the suspension of the September drop. For the life of me, I do not understand why they have not done that already.
There is the clear recommendation of the commission that if the negotiations go beyond 1st September the bonus drop in September should be suspended until they are completed, and the Government must know as well as I know that there is no human or reasonable probability of those negotiations being concluded by 1st September, affecting as they do some 300,000 people, and affecting long periods of time ahead. I was hoping that the Government would have made the gesture of saying at once that they did not intend to apply the September drop. I find it difficult to understand, and I will tell the House why. When we questioned the Chancellor of the Exchequer the other day, and when my hon. Friend the Member for Crewe (Mr. Bowen) pressed him as to whether the Government would not make a statement before the House rose, the Chancellor of the Exchequer said in effect, "We have only had the report a few days, and there is no special urgency; we are considering it, and we shall act upon it as soon as we have been able to give due consideration to the matter."
I would like the House to notice that this week there has been sent out to the retired civil servants, the pensioners, from the Government who as yet have not had time to consider the matter, a notice that their pensions are to be reduced from a 55 level to a 50 level. The Government, apparently, have been able to consider and to take action upon the reduction in the pensions of the retired civil servants, but they have not been able to make to this House before it adjourns a statement of their intentions in regard to the recommendation that the September drop should be suspended. That I regard as profoundly unsatisfactory. I wish to warn the House of Commons, with great respect but with some firmness that there is in the Civil Service to-day more profound and bitter discontent than ever I have seen in it during the whole of my 20 years' connection with it. [An HON. MEMBER: "A
testimonial to the Socialist Government."] No, I do not put it that way. We are finding not very much difference between any kind of Government with regard to wage issues. I make a qualification—in common honesty I ought to make a qualification—that the Socialist Chancellor did, in fact, treat us rather better than the Tory Chancellor, at any rate for a period, by not exacting the full force of the 1920 agreement, but even the Socialist Chancellor has now dropped that, and the agreement is being applied as it would have been applied if a Conservative Government had remained in power.
That is wrong on two grounds. It is wrong, in my view, from the point of view of the Civil Service, and it is wrong from the point of view of the country. We have now reached a stage in the Civil Service—and the House of Commons would do well to give it its serious attention—when the Civil Service can be divided into three broad categories. First of all there are the higher grades. Those higher grades are removed from the pressure of actual physical want, but they are remunerated on scales of pay very much lower than those obtaining in industry and commerce for positions of comparable responsibility. That, in itself, is serious, and it is serious because that circumstance is leading to a slow drift from Whitehall to the City which is highly undesirable from a social point of view. Then you get the middle grades, and in the middle grades you get an area of real hardship and suffering. You get that real suffering because much of the expenditure of those middle grades takes the form of fixed standing charges, which a man has to meet however much his bonus falls down, and there, in an area where fixed charges represent a large part of a man's expenditure and where bonus is steadily going down, there is real hardship, even though it is hardship of the respectable, and more or less silent kind.
At the bottom—and I would like the late Prime Minister to notice this, because he has his share of responsibility—you have a condition of chronic and acute under-payment which is a disgrace to any Government in Great Britain. You have 150,000 civil servants in this country receiving, including their bonus, less than £3 a week, and of that 150,000, there are large areas receiving less than £2 10s. a
week and large areas receiving less even than £2 a week, including their bonus. I regard that as a disgrace. I want to say to the House of Commons that unless it desires to put in jeopardy what I regard as an almost incomparable instrument, the British Civil Service, it will do well to give early attention to wage and salary grievances of civil servants in our country to-day.
Yesterday morning I spent in a police court. I saw there a young civil servant on trial, and the trial concluded by his being sent to prison, for accepting bribes from a contractor. In my view, the person who ought to have been in the dock yesterday was not that civil servant, but the man or men responsible for determining the conditions upon which he had been employed. For that civil servant, an ex-soldier, an ex-temporary brought into the established class at a rate appropriate to a boy of 18 years of age, with a wife and family to maintain, became corrupt very largely because of the economic pressure to which he was subjected to by the abominable wages he was receiving. I think that there ought to have been other men in the dock yesterday, and certainly we shall be in the dock of public opinion unless we give reasonable attention to these grievances. I conclude by saying that there are in the service, as the whole House knows, widespread discontent, chronic underpayment, and acute suffering and want, where men, after they have done a day's work for the State, have to go out and do another day's work for a private employer in order to keep their heads above water. There are men by the dozen having to accept all kinds of evening occupations in order to supplement the wage which the State gives them for a full day's work. I say that in those circumstances it is absolutely wrong to drive the level of those wages still lower, wrong from a Civil Service point of view, and wrong from the point of view of the House of Commons.
I ask the House to insist with me that before the House breaks up to-morrow and goes away for its holiday, there should be a statement from the Government making it plain that the September drop shall be suspended. To my hon. Friends on this side I should like to say this: They and I for the time being have parted company in regard to political
parties, but we both have the same common interest in protecting the wage standards in this country. I submit that the very last way to deal with the national situation, which has been described in such grave terms by the Chancellor of the Exchequer and others, is to go on cutting down the standard of life and the purchasing power of the masses. By doing that we do not solve unemployment or minimise the crisis. We aggravate it, and we intensify that gap between the power to produce and consume which again and again we have been told lies at the root of the unemployment problem. Therefore, both on the ground of broad politics and of the existing situation inside the Civil Service, I beg Members of the House of Commons on all sides to join with me in an urgent request to the Government that they will take an opportunity, either now or to-morrow, of making it plain to the 300,000 men and women affected that the September drop will not be imposed, but that the Government will come into negotiations with us with a view to finding a permanent settlement of the problem of the cost-of-living bonus in the Civil Service.

Mr. BOWEN: I congratulate my hon. Friend the Member for West Wolverhampton (Mr. W. J. Brown) on his very excellent review of the case of the Civil Service on the bonus question. I wish to address myself to one simple yet important point. It is the question which immediately concerns the Civil Service as to whether the Chancellor of the Exchequer will or will not make a declaration that there is to be no cut in bonus next September; 300,000 civil servants have been waiting for him to say something like that for a long time. The Chancellor of the Exchequer on two occasions suspended the drop in bonus but he did so, on the statement of the Financial Secretary to the Treasury subsequently, because this question had been referred to the Royal Commission on the Civil Service. The Financial Secretary at that time gave the House to understand that this question was really in suspense because the principle of it had been referred to the Commission for examination. That was our point of view, because, whether we liked it or not, the Government did submit this question to a Royal Commission two
years ago, and we have been, therefore, endeavouring to have two things done—first, to get a satisfactory understanding of the position and recommendations from the Royal Commission; and, secondly, to get the Government to agree that while that was being considered, the whole question should be regarded as sub judice.
I suggest that we who are interested in the Civil Service have not been unfair. I can quite conceive that if it were a large industrial question, or something analogous, it would be regarded as sub judice and consideration would be given to the claims of the people affected. In this connection, however, we have not been able to convince the Government that that is the right line. It is not my purpose to condemn the Government. I can simply and easily condemn the system under which civil servants have been working for a very long time. It-is not sufficient to remind us—and I am not complaining that it has been done—that the civil servants, on this bonus question, have been working under an agreement established in 1920, when at that time there was little basis upon which to appeal for anything, and we had to take the very best we could get and the only thing which was available, anticipating that before very long we should have a review of the whole question in order to get down to a more stabilised or concrete basis.
The hon. Member for West Wolverhampton has already indicated to the House the weaknesses of that agreement and how in its incidence it has worked unfairly to a very large number of civil servants in our attempt, therefore, to get the Government to review this question, we have been engaging our minds as to the best suggestions we could make to the Royal Commission in order to put to the Commission what we conceived to be a not unreasonable ease. I am not going to say anything to-night about their recommendations, except that they have profoundly disappointed the Civil Service. What I do wish to emphasise is that if the speeches we have heard to-night about finance are to be taken as indicating what is required of people in the country, and if those speeches suggest that there are to be sacrifices, then I am entitled to say that
the civil servants in the last 10 years have made sacrifices unequalled in any other industry; at least, if I am not to be accused of exaggeration, they have made sacrifices of such a nature that they can rightly turn to the House of Commons and say, "You should not demand further sacrifices of us."
Last March, notwithstanding the very eloquent appeal made to the Chancellor of the Exchequer—eloquent as expressed by the desire of hon. Members and supporters of our own side—he was unable to meet our request that there should be no cut in the bonus in March. He did it at that time on national grounds, I presume. At least, I am prepared to say that he could probably find justification for anything of that nature on national grounds. I did hope, however, that he could admit the strength of the appeal that was made to him cm that occasion. He was unable to meet our request, and the Government saved £1,000,000 or £1,500,000; the Civil Service lost it. But now we have come to the point when it must be said that the refusal of the Chancellor of the Exchequer to make a statement any more definite than he has up to now is the subject of grave disappointment throughout the service. I make this appeal to him to-night, through the Financial Secretary to the Treasury, that before the House rises he will say that there will be no further cut in the bonus of civil servants.
The Royal Commission recommend consolidation forthwith. We have had no consultation with the Chancellor of the Exchequer as to the terms of consolidation. The Royal Commission recommend that until we can get that discussion, the Chancellor of the Exchequer shall suspend the drop in the bonus, which shall continue to be paid on the existing rate. If the Chancellor of the Exchequer is looking for authority from a Committee, there is one for him. If he is looking to the Economy Committee for some suggestion on the point, we cannot regard the reports that we have teen in the Press as being very encouraging to us. The cuts suffered by the Civil Service already have been heavy. Any suggestion of a further cut in bonus, plus a further cut of 10 per cent., which, it is suggested in the Press, is in the report of the Economy Committee, is fantastic. That would not be economy; it would be robbery. There-
fore, I am bound to say that we should regard it as such. In these circumstances, I do not think that we are unreasonable in asking the Chancellor of the Exchequer, after all that has been said, to suspend any further cuts. It does not need a long speech from me to tell him the facts of the case, because he and the Financial Secretary to the Treasury know them full well. Hon. Members on this side of the House know them full well. Hon. Members on the opposite side, in both parties, know the facts and individually have expressed their sympathy with the claim of the Civil Service that there should be no further cuts. The Chancellor of the Exchequer will find a general appeal from all quarters of the House that there should be no cut in September.
Reference has already been made to the application of a cut to the poorer people now outside the Civil Service—the pensioners. It has concerned me very much to have had dozens of letters during this week asking me the meaning of this little slip of paper—a cold-blooded "intimation to pensioners that they are to have a cut at the present time. It reads:
The Controller and Accountant-General bogs to inform you that the supplementary portion of your pension has been based upon a cost of living figure of 50 for the quarter 1st July to 30th September, 1931.
Obviously, that is just the automatic application of the old existing system. It was what was done in March for the pensioners, as for the active civil servants. The Chancellor of the Exchequer was asked by my hon. Friend the Member for Carlisle (Mr. Middleton) a week or two ago what was going to happen to these pensioners in regard to the bonus issue in September. If my memory serves me correctly, my right hon. Friend replied that their conditions would be considered in the light of something that might be done for the active civil servants. He was very guarded about it. I had hopes, seeing that he had the report of the Royal Commission quite recently, that he would, as he could easily have done, stop this drop. He could have done that without very much difficulty. He could have stopped it in anticipation of acting upon the advice of the Royal Commission, and have said that payment should continue at 55
for active civil servants until the question could be discussed. I hope that it is not too late for an assurance to be given to these aged people that their cut is not to be permanent, and that it will be restored to them.
The application of bonus to the Civil Service, even where bonus is applied to the full 100 per cent. of its value to people receiving pay of 35s. a week, basic, results in a very small return for many thousands of people whom I have the honour to represent, thousands of them, all ex-service men, who have come into the Post Office service, married men with families. These men have had to move around anywhere to find dwellings, and scorces of them have to pay in rent anything from 15s. to 20s. a week out of the meagre remuneration that they may be given in the Post Office. How can such men, even with the full 100 per cent. bonus, stand another cut in September? I suggest to my industrial Friends on this side that they could not justify it in their constituencies, and I am sure that they would not attempt to justify it. I know the feeling on this side of the House to be entirely sympathetic to the plea that no further cuts should take place.
One hon. Member opposite, this evening, said that in order to right things for the nation, we must stir up the blood of the people and stiffen their sinews. You cannot stir up much blood on Post Office wages. Instead of stiffening sinews, it seems to me that unless we have a suspension of the coming cut in September, there will be a tightening of the belt and an extinction of the individual. In these circumstances, I appeal to the Financial Secretary to give us some hope and encouragement so that we may tell our people that, having regard to the two long years of wait which the reference of this subject to the Royal Commission has caused, the Government will implement the understanding which he himself gave to the House 18 months ago, that in consideration of the Royal Commission's Report they would suspend the bonus cut. We hope that he will say on this occasion, now that they have got the Report and the recommendations in regard to consolidation of bonus, that he is prepared at once to say that there will be no cut this time. There will be no
difficulty in understanding the implications of the report. They can wait. Many of them may take years to implement. We do not want to press the Government upon that point, but we do want to press the Chancellor of the Exchequer or the Financial Secretary, and anyone else who may be influenced, that our people cannot stand anything more than they have had up to now.

The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): I quite understand the feeling that has been expressed by my hon. Friend the Member for Crewe (Mr. Bowen) and the hon. Member for West Wolverhamption (Mr. W. J. Brown), and I appreciate the way in which my hon. Friend, with great moderation, put the claim for an early decision on a matter which is so vital to large numbers of people. I can assure him that the points which he has put forward in favour of the suspension of the bonus cut will be taken into most careful consideration; in fact, they are already being taken into the most careful consideration by the Government. I appreciate further the distinction which the hon. Member has drawn between the points dealing with remuneration and those dealing with conditions, and several other matters affecting the Civil Service.
I appreciate the desire for an early decision, and in other circumstances the Chancellor of the Exchequer might perhaps have been in a position to give an answer within a few days of the publication of the report, but my right hon. Friend has been extraordinarily busily occupied during the whole of the last few weeks and has not yet had time to devote to this report that full consideration which under other circumstances he would have given to it. Therefore, although I fully understand the impatience of my hon. Friends, I am afraid that I cannot add anything to what he has already said on the subject. At the same time, my right hon. Friend and the Government will take this report into their most careful consideration and at the earliest possible moment they will be in a position to announce their decision. There is still some considerable time before the question of the September bonus has to be decided, and the Government will come to a decision of one kind or another before that time
arrives. [Interruption.] I mean that the matter will not be allowed to go by default.

Mr. WALLACE: Can the Financial Secretary give the House any definite indication whether a decision will be reached in one week or two weeks from now?

Mr. PETHICK-LAWRENCE: I cannot give an exact time, it all depends upon my right hon. Friend, who has already taken the matter into consideration and will come to a decision early and announce it at the earliest possible date. With regard to the bonus for the purposes of pension, it was said by both my hon. Friends that since the production of the report the Chancellor has already come to a decision on the question of the bonus of the pensioners as distinct from the bonus of those in active service. That is not the case. What happened in regard to the pensioners took place before the publication of the report of the Royal Commission on the Civil Service, and, in a reply to a question, my right hon. Friend definitely stated the position. I am sorry that I cannot add anything more to what I have said. Owing to the great pressure on his time and on the time of the Government, it has not been possible to give adequate consideration up to the present to this very important matter.

Duchess of ATHOLL: I do not desire to speak at any length on this subject to-night, because, as a member of the Royal Commission, I have already taken my share in expressing my opinions at some length in the report, but I should like to remove a misconception which seems to prevail in the mind of the two hon. Members who have introduced this subject. Both hon. Members have spoken as if the Commission as a whole recommended the consolidation of bonus and salary and getting rid altogether of the sliding scale. It is true that the great majority of the Royal Commission recommended consolidation, and that changes should only be made two or three years hence if there has been a considerable movement in salaries outside the Service, but there were some members of the Commission who differed from that finding. There were two members of the Commission who thought that in view of the great instability, and continuing in-
stability, of prices, it was not desirable at all to consolidate at the present moment, but they stated in paragraph 347 that they agreed that there should be a reconsideration of salaries in 1934, the date recommended as a possible date for consideration by the majority of the Commission.
There were two other members, of whom I was one, who recommended a sort of half-way house between the recommendation of the majority and the recommendation of the two members who did not wish any consolidation. My colleague and I recognise fully the reductions already made in the salaries of the Civil Service, and we join with the majority of our colleagues in wishing to see that readjustment of salaries which has been somewhat unkindly described by the hon. Member for West Wolverhampton (Mr. W. J. Brown). I will not quarrel with his description, except to say that I do not think his biblical illustration was quite accurately stated. He said that from him that hath was being taken away that which he hath, and from him that hath not was also being taken away that which he hath. That is not the correct biblical quotation, and it was not the suggestion of the majority of the Commission. We did suggest a scale which would have meant a little more for the lower-paid classes, and very little less for others, but a very small reduction compared with the reduction which will take place if there is a further drop in the bonus as from September next. If the hon. Member had had before him the alternative tables which were before the Royal Commission, and which they studied with great care, he would have seen a considerable difference between the proposals of the Royal Commission and the figures in September if the cut is allowed to operate.
I wish to say further that my colleague and I desire to see the September drop averted, and we join with our colleagues therefore in agreeing with the revised salary proposed. We also wish to ease the uncertainty caused by the full swing of the pendulum, which has existed for some years, but in view of the prevailing instability of prices we felt that it was difficult to stabilise fully and completely at the present moment. We had before us some very weighty evidence on
that subject, which no doubt the Financial Secretary has noted. For instance, the Director of Treasury Establishments, when he came before the Royal Commission first in the autumn of 1929 advised consolidation, but when he appeared two or three months later before the Royal Commission reported he felt that in view of the instability of prices it was not the time to consolidate.
My colleague and I had in mind a scheme something like that proposed by the President of the London Midland and Scottish Railway, Sir Josiah Stamp, namely, that there should be no alteration in salaries unless there was a bigger drop or a bigger change in the cost of living than that of which account has hitherto been taken—no alteration in salary unless there was a larger change in the cost of living and it had prevailed for a longer period than usual. We should have liked to see some scheme of that kind worked out. But it is indicated only broadly and not very fully in the paragraph of the report that refers to it. I hope that the House will forgive me just mentioning this matter, because the subject is of great importance, and my colleague and I have been misrepresented in this matter along with two others who differ more completely from the finding of the Royal Commission. I think it is only right that the House should be informed quite clearly what the position is.
My colleague and I propose gradual instead of sudden stabilisation, a gradual slowing down of the pendulum that has swung from side to side from time to time. We felt hat something of that kind would be fairer both to the Service and to the country; that if prices recovered, as we all hope they may in the next two or three years, undoubtedly our proposals would be more beneficial to members of the Service than the proposals of the majority. But, of course, no one can say how prices will move. I only wish to say that there is that chance, that if prices recover, our proposals would be more beneficial to the Service than a complete stabilisation at the moment, which the majority of the Royal Commission did not wish to see disturbed for two or three years. I am sure that the Chancellor of the Exchequer and the Financial Secretary to the Treasury will give all three sets of proposals their full consideration.

WOMEN POLICE.

Miss PICTON-TURBERVILL: I wish to speak on a subject somewhat remote from that with which we have been dealing. I wish to draw the attention of the Home Secretary to the subject of the women police, the necessity for an improvement of the conditions of their work, and an extension of their useful services. I do not conceal from the House that I have a very peculiar desire to enlist the sympathy and active support of hon. Members on all sides for the work of the women police, the value of which, in my judgment, is far too little known. It was about nine months ago that the Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor) asked a question in the House on the subject of the women police. I dared to put a supplementary question, asking whether it would not be possible to have a woman put on the Police Council, and that question of mine was received with derisive laughter. That indicated to me at once that a very large number of hon. Members were unacquainted with the work of the women police. I determined to pursue the matter, for I was convinced that the House did not know what the women police really were doing. I called a meeting in a Committee room upstairs, and invited hon. Members and representatives of outside organisations who were interested in the subject to attend.
10.0 p.m.
Hon. Members who call meetings in Committee rooms at five or six o'clock are well aware of the extreme anxiety of the organiser lest there should be any Members present or not. They generally consider themselves fortunate if five or 10 appear. On this occasion no fewer than 50 Members of Parliament assembled in Committee Room 14; indeed the room was so crowded that we were unable to accommodate all the representatives from outside organisations. What I felt convinced would happen was exactly what did happen. When Mrs. Keynes, representing the National Council of Women, and Lady Cushendun, representing the National Union of Equal Citizens, had made their statements on the work of the women police, all the 50 Members voted unanimously in favour of the resolution that was then brought forward. One hon. Member after another, after having heard exactly what was the work of the
women police, got up and said that he had never realised what the work was. They all admitted that directly they heard of a woman policeman they had visualised a woman struggling with a drunken man, and naturally the picture was repellent to them. The women police, although of course they are thoroughly trained in everything, are seconded for special work. When the Members heard this, their views on the whole subject were entirely altered.
Far from women police having such work as to struggle with drunken men, they are put aside for special work, mainly in connection with women and children in the courts, such as taking statements from women and children, whether the victims or witnesses, in all cases connected with sexual offences, such as criminal and indecent assault, abortion, infanticide, the concealment of birth, attending women and children at courts, the watching of women prisoners (cases of attempted suicides in hospital), and the searching, escorting and supervision of women prisoners. I cannot do better here than quote what the hon. and learned Member for East Fife (Mr. Millar) said when we were on a deputation to the Home Secretary a few weeks ago. This is what he said:
I refer particularly to the need for taking statements from women and children in all cases in connection with sexual offences. If I may say so from my experience of the Crown Office in Edinburgh, in dealing with crime, I have been impressed with the number of cases where it is essential that you should get a full and complete statement, and that a woman should be in u position to deal with a woman and child directly. It is impossible for police officers with the best intentions or qualifications always to be able to speak with a woman or a child in the same way that a woman can do. Then with regard to escort and conveyance of women and children to homes and hospitals, there again there is a distinct sphere which we feel must he confined to women police officers. We put our case as high as this, that we think in connection with such duties women alone should be the police officers in charge and that those duties should only be carried out by the women themselves qualified for such special purposes. I refer also to the searching and attending on female prisoners at police stations and watching of suicides and others in hospitals. Watching the women prisoners by male officers is a very undesirable thing, we feel, and we are certain that there are very strong grounds which I do not desire to take up your time with in going into them in greater detail
that would support the argument that in such cases women should be obliged to be utilised.
I will give one or two instances which I feel confident will immediately win the sympathy of the House in favour of the wider use of women police. There was one instance where a young girl in service was charged with destroying her baby. Policemen arrived with a warrant, and searched through all her clothes and belongings and her bedding, and questioned her. This matter was reported to a certain committee asking what could be done to ensure that policewomen should be used in those cases. There was another case where a girl was brought before a police court for attempted suicide in a police cell. A policeman gave evidence that he was patrolling outside the women's cells, looked through the observation window, and saw the girl attempting to commit suicide. This case was given before the Royal Commission. It is true that the case was a newspaper report, but a friend of mine herself went to see the magistrate in question and the gaoler. The magistrate himself said that it was perfectly correct that policemen were watching the women's cells at night, and he heartily agreed that policewomen should be entirely in charge of the women in police cells.
I remember once that a deputation attended an hon. Member on the other side of the House—it was two or three years ago—in an effort to get his sympathy enlisted on behalf of women police, and they enumerated cases to him. When he had heard of many cases in which policemen, in the most undesirable conditions, dealt with women prisoners, he brought his fist down with a great thump on the table, and said, "I wonder you women stand it." The answer to him was that for 10 years we had been trying not to stand it. Moreover, it is not only on behalf of the women themselves that I speak, It is not fair on the policemen, very often, that they should be called to do duties which are repugnant to them and unfitted for them to do, and of which they would gladly be relieved.
I would like to drive home the fact that there is no antipathy at all in the male police force to having police women seconded for this special service. Indeed,
they desire it. It is true that there are certain chief constables who are backward and, shall I say, old-fashioned, and who are not employing women police in their counties and boroughs, but the policemen who are working with the women have no antipathy at all to having the policewomen. Here I would quote what Lord Byng said only two months ago to a deputation. He said:
There is no antipathy whatever amongst the police of the Metropolis to policewomen. Throughout the force there is a tremendous sympathy and a wish fulness to increase them.
I should like to say here that when we urge an increase in the number of policewomen, it is not to substitute them for the male force, but to appoint women in addition. The instance that I have described of a man watching a woman prisoner through the observation window could not take place in the Metropolitan Police Force, because in that force there is an efficient women police service, and not only that, but there has been appointed a woman staff officer of women police. Therefore, I do not wish to be misunderstood. The instances that I have described where, under most undesirable circumstances policemen have dealt with women prisoners, could not to-day happen in the Metropolitan Police Force, although it could and does happen in nearly all of our large cities.
The duties of the women police in the Metropolitan Police Force are to patrol the streets and open spaces in uniform, primarily in order to advise young girls frequenting the streets, to protect children and young people, and to deal with offences against the solicitation laws, also the searching, custody, and escort of women prisoners and juvenile delinquents. Surely it is obvious that women here can render a great service in the police force. Their record in the Metropolitan police is an excellent one, and not only there but throughout the country where the chief constables have employed policewomen. For instance, the Chief Constable of Birmingham says:
Women police have been an unqualified success.
In Chesterfield the Chief Constable says:
Her services have proved very valuable and the experiment quite successful,
At Eastbourne, the Chief Constable writes:
The services of the policewomen in this county borough have proved to be most valuable and certainly justified in every way.
It is an excellent record as far as the Metropolitan police and those few enlightened places where there are policewomen are concerned, but look at the provinces. How few policewomen there are there. Out of 60 counties there are only six with women police, and only 34 out of 121 boroughs, leaving 54 counties with no policewomen to do these special duties and 87 boroughs with no policewomen at all, and that in spite of the fact that the Committee of which Sir John Baird was chairman as long ago as 1920 recommended that there should be a large increase in the women police, and in spite of the Bridgeman Committee's Report. In 1924, when the present Lord Bridgeman was Home Secretary, there was a departmental inquiry, when the whole question of the women police was most carefully examined. Both those Committees recommended that there should be a further increase in the women police force. Let me read a summary of some of the conclusions of the Bridge-man Departmental Committee:
That every police authority should provide, as far as practicable, for the statements of women and children when sexual crimes are in question being taken by policewomen.
Another conclusion was:
That the efficiency of the police service has been improved by the employment of policewomen.
Nevertheless, in spite of that, in the provinces only six out of GO counties have women police, and only 34 out of 124 boroughs, and in spite of the fact that for 10 years the Home Office has issued circulars to the boroughs and counties urging them to appoint women police.
Even where women police are appointed the conditions are unsatisfactory and it is to this point that I hope the Under-Secretary will give special attention when he replies. There are no standardised regulations whatever for the women police. The regulations vary throughout the country and regulations in Glasgow may differ from those in Carlisle. The result has been to hinder to a large extent, the recruiting of suitable women.
I believe that the Under-Secretary himself will agree with me that while the Home Office has been sending circulars to counties and boroughs urging them to have women police, yet one of the greatest obstacles in the way of recruiting suitable women for this important work has been the failure of the Home Office to define by regulation, either the qualifications or the conditions of service. If I felt that I had unlimited time to-night I would dwell upon this point.
It is well known that before 1919 there were no standardised regulations for the male police and that the dissatisfaction thus caused was so great that it resulted in the unprecedented event of a one-day strike in the case of a police force. Now we have standardised regulations for policemen but none for policewomen, and that in spite of the fact that for 12 years the National Council of Women has been doing very good work by means of resolutions at conferences, deputations to successive Home Secretaries and evidence submitted to Departmental Commissions, in urging two things, namely standardised regulations and the appointment of a woman to the Police Council to help in framing those regulations. I had the honour of presenting a deputation to the Home Secretary two months, ago and on that occasion magnificent speeches were made by the hon. and learned Member for East Fife, the hon. Member for Central Bradford (Mr. Leach) and the hon. and gallant Member for Ayr Burghs (Lieut.-Colonel Moore) representing the three parties in this House. They urged the drafting of standardised regulations for policewomen—which is perfectly possible under Section 4 of the Police Act, 1919—and the appointment of a woman to the Council, and I am glad to say that the Home Secretary in reply wrote as follows:
The two questions which you and your colleagues stressed were the appointment of a woman to the Police Control and the drafting of regulations so that they might be submitted to the council under Section 4 of the Police Act, 1919. You will be glad to know that I find myself able to meet you on both these questions. I have come to the conclusion—and I am sure you will agree—that no better choice could be found for the Council than Miss Peto and as Lord Byng has consented to her serving she will be summoned to a meeting which I hope to arrange before very long.
Now that regulations are to be drawn up for policewomen it is only reasonable
that there should be a woman on the council helping to draw up those regulations. In the name of 50 Members of Parliament on all sides of the House who attended the meeting to which I have referred, and in the name of the executive committee which was then formed, I desire to thank the Home Secretary for having acceded to those two requests. There are four points on which I should like a definite reply from the Under-Secretary. First is the Home Secretary prepared to take further steps to secure more policewomen in the provinces and to bring in a Bill making policewomen compulsory throughout the country? I know the difficulty which exists where local authoriteis are not sufficiently enlightened to welcome such a Measure and I know that in the past it has been thought necessary to secure the agreement of local authorities in any progressive step but I question whether we would have policemen throughout the country to-day, or whether we would have such a splendid system of education to-day if we had always waited on the local authorities before taking any step forward. If we had always done so, I am not sure that we would not still be in the Dark Ages. I therefore ask whether it would be possible to bring in a Measure making it compulsory to have policewomen, at any rate in the large cities and I leave it to the Home Secretary to decide as to the size of the cities to be included.
My second question is this. Will the regulations that the Home Secretary is now drawing up follow the recommendations that were made by the Baird and Bridgeman Committees as long ago as 1920 and 1924, and how soon will they be made public? These statutory regulations are being awaited with greater interest and more anxiety throughout the country than a great many hon. Members realise, because on their form and scope will depend the success of the women police movement. We must have such regulations as will encourage women of education and experience to offer themselves for the force. When I use that phrase, I mean women of all classes in life, and if the regulations are to be successful throughout the country, they must be such as will encourage women of education and experience to offer themselves for the service. The responsibility of drafting these regulations lies with the Home Secretary.
My third question is whether the Home Office will be prepared to appoint a woman inspector of police women for the country attached to the Home Office. Is it such a revolutionary suggestion when it was one of the recommendations of the Bridgeman report in 1924? One of the conclusions of that Committee was that it would be desirable when the women police employed in the provinces increased—they have increased since then, although not as much as they ought to have done—that a woman should be appointed to assist His Majesty's Inspector of Police in advising the Home Office and assisting the local authorities in connection with their employment. The duties of a woman inspector would be to help the Home Office, see that the regulations were carried out to assist His Majesty's Inspector of Police with the inspection of police women, and to be available for consultation by local authorities to advise on their employment—to do in fact for the provinces and the large cities what Miss Peto does for the metropolitan area.
That will mean an additional woman at the Home Office. We well know that there is a cry for economy everywhere. Nevertheless, it is not a good thing to economise on the subject of women police. As long ago as 1922, the right hon. Gentleman the Member for Hillhead (Sir R. Horne) wrote a letter when it was suggested that there should be economy on the women police. The right hon. Gentleman, who was in sympathy with the employment of women police and was not a profligate Chancellor, said:
I may say to you that when I was at the Treasury it was represented to me that economy could be effected in the cost of the police by reducing the women force. I had, however, come to the view that a force of women police has advantages which cannot otherwise be supplied. I am accordingly of the opinion that a certain force of women police should be appointed in all the large towns.
That was written nearly 10 years ago, but so far it is a pious hope. Therefore I hope that with so shining an example as the right hon. Gentleman the Member for Hillhead, who was Chancellor of the Exchequer when he refused to economise on women police, the question of economy will not prevent the Home Secretary considering the appointment of a woman at the Home Office
to supervise the appointment of women police throughout the country. I do not suppose that the Home Office will honour me by asking me to recommend anybody for the position, but I could recommend a woman of experience of whom they could be proud at the Home Office.
My fourth and final point is that the present staff officer of women police in the Metropolitan Police Force has not yet been confirmed or made permanent in her appointment. Miss Peto was appointed first for one year, did excellent service, and satisfied everybody. Then she was temporarily appointed for another nine months or another year. We feel that this work will not be stabilised until the staff officer of women police is confirmed and made permanent by being assigned rank and definite functions. Nobody denies that excellent work has been done, and if it is to be looked upon as permanent work we feel that the appointment should be confirmed.
I have come to the end. I have done my best to state my case quite fairly, and if I have made an error in anything I have said as to the relations between the Police Council and the Home Office I would beg the hon. Gentleman in his reply not to do as Cabinet Ministers sometimes do on deputations. If there happens to be one error in any one of the speeches made by the members of a deputation, it is not an uncommon thing for a Cabinet Minister—I am not referring specially to the present Home Secretary—to devote most of his reply to dwelling upon that one error and forget to deal with important points. If I have made any mistake I would beg the hon. Member—I do not say he should not mention it—not to dwell upon it to the exclusion of some of the questions I have asked. The reply of the Home Secretary to-night, which will be published in the OFFICIAL REPORT to-morrow, will be read with keen interest, and may I hope with enthusiasm, by the organised women of all parties throughout this country. It has been proved that the use of trained policewomen creates a better social order in our cities, adds to the well being of prisoners and captives, and is a further step in the civilisation of the nation, and I hope that your reply, Sir, will be all that we desire.

Lieut.-Colonel MOORE: I rise with the greatest possible pleasure to support the appeal so eloquently and so persuasively made by the hon. Lady. As I do not anticipate ever being in the hands of a woman police officer—[Interruption]—or the arms—I feel that I can support this appeal without the risk of being accused of any motive of self-interest, and therefore I can put more enthusiasm into the appeal than, possibly, many other Members of this House who do not stand in the same position as myself. I know the answer that is going to be given. It is the same answer, probably, that we got on the deputation which was so ably led by the hon. Lady. The Home Secretary or his able Parliamentary Secretary will say that we are knocking at an open door. That may be so, but the trouble is that when we pass through the door and get into the room we find it empty. I do not say empty of a desire to help us, but empty of determination and courage. There is no one in this House, probably, who is more sympathetic towards the women police movement than the hon. Member occupying the Front Bench at the moment, but, nevertheless, the Home Secretary and his assistants at the Home Office lack the courage to impress upon local authorities that it is the intention of the Home Office that women police shall be made a force in this country. That is the whole trouble. We cannot expect local authorities to take a strong and decisive line on this subject unless there is a driving force behind them from the Home Office.
That is our whole trouble to-day, and that is the reason for the lack of enthusiasm for women police. The local authorities are a conservative race, and they do not like embarking upon any new experiments. There is one thing which the Home Office can do, and that is to issue definite regulations on the subject of women police. They ought to give a lead to the local authorities and the chief constables, and then those authorities will feel that they have someone behind them in regard to employing women police. For years the public has been very apathetic in regard to this question. It was not until five years ago, when the Savidge case occurred, that the conscience of the public was stirred, and the Royal Commission was appointed. The subject was
then thoroughly investigated, and every effort was made to create a healthy public opinion on this question of women police, but nothing was done.
I remember a deputation waiting on the present Lord Brentford when he was Home Secretary; he expressed himself very sympathetically and promised to engage 50 additional police for London alone, but nothing has been done in the matter. The reason given for not doing anything further in regard to the employment of women police is that the Home Office say they have not proper accommodation for women police, because separate hostels and barracks would be required. I know that Lord Byng has a soldier's mind, but I feel that the type of woman which is obtainable to act as police can be safely trusted in London without the disciplinary methods which apply to barracks. I urge the necessity for the Home Secretary issuing proper regulations so as to give a lead to local authorities and chief constables. This is the Home Office responsibility, and they must recognise it. The Home Office ought not to throw that burden on the local authorities and shield themselves behind them. The result of this policy is that we get nothing done.
I want to make it clear that the Home Secretary is responsible because that is his job. If the right hon. Gentleman does not issue proper regulations, the first people who will suffer will be the women police, and the next people to suffer will be the public. If you do not create among the police force a proper sense of security and get support from the public, then you will not get the right kind of people to offer to serve as women police. We want in the police force women of experience, integrity and education. We want to attract a good type of young girls and young women who will be given good and wise advice, and be sympathetically received.
In Glasgow, there is a policewoman with 10 years' service who is in exactly the same position as a young constable with a week's service. She has one week's holiday each year and nothing to which to look forward. She receives no recognition whatever of her nine years' and 51 weeks' service which she has given to the country. That is unfair and unjust, and
will not induce the right type of women to come forward. It has taken us 100 years to build up this great police force of which we are so proud, and, as far as I can see, at the rate at which the Home Office is travelling, it will take us another 100 years to build up an adequate force of women police.
I would say, an conclusion, that there are three or four urgent necessities that can be carried out by the Home Office. One is to issue regulations as to numbers, or, in other words, to create sufficient additional women police to carry out the work for which they are required and are suitable. The hon. Lady has referred to the desire for economy. That word was not used a year ago when motor police were established, or when mounted constables were established only a few years ago. These two types of policemen are presumably for the purpose of saving bodies. Women police are principally designed to save souls. Balance those two things together, and see where you can properly economise. I say, economise on your mounted bodies that run round the roads creating a good deal of alarm and despondency in the hearts of moderate-going motorists who are only seeking to do a quiet day's work in a quiet way, and to have a little happiness and security. Their lives are threatened from behind and in front by these high-power motor bicycles. Remember the word "economy,' I am not belittling at all those magnificent figures that we see at Hyde Park Corner on their horses, waving their hands to the policeman on the beat who does the work. I do not know what particular use they are, though they are very nice looking and afford a tremendous lot of fun to our oversea visitors. [Interruption.] I think they make a very admirable addition to the amenities of London, but when it comes to a question of economy there are some things that can be bought too dear.
There is another point that I want to make, and that is that we want equality of training and duties. We want to ensure that, when a policewoman is appointed to a district where possibly there are not sufficient duties to occupy her full time as a policewoman, she can be passed on and her spare time devoted to doing the work of a policeman. That is a matter of some urgency, and I would
impress it upon the Home Secretary, because it can be legitimately advanced that this would not be an economic proposition if women were restricted to one particular type of service; but, if they are trained as men are trained, if they are given police instruction and trained in police duties, they will be in a position to take over a man's job to complete their full-time service. As a final point there must be equality of pay and pension. It is no use training them in the duties of policemen unless you give them a policeman's pay and pension, and there is no other way by which you can get the right type of women into the force. You must give them a feeling of security and hope, and a career of dignity to themselves and of usefulness to the community. There is also the question of equality of uniform. I do not want the women police to be clothed like Ziegfeld Follies or chorus girls, but at the same time there is a great deal to be gained by clothing them neatly, decently, and with a certain amount of feminine attraction—[Interruption.] I say this very seriously. I believe that there is a deep-laid conspiracy the part of the Home Office and the police authorities. They have clothed these women so—

Mrs. MANNING: Hideously!

Lieut.-Colonel MOORE: Yes, they have clothed them hideously, with the design of ensuring that no man will risk being arrested by them. It may be in the end a very good policy and, no doubt, if they could have attractive young women, perhaps with more pleasant faces and so on, they would get more arrests. Then the right hon. Gentleman would have the police courts full and the prisons congested. But there is a happy medium, and it would be greatly to the interest of the force, and of the policewomen themselves, if they gave them a slightly more attractive uniform, slightly higher heels, not the great fat clumps that they wear, and make them as they should be, an asset to the community, to themselves, and to the force. The Home' Secretary may think this too humorous a speech. I have not intended it to be that at all, because I believe the development of this women police force, with the right kind of women employed in it, will mean more for another type of women in our midst
that we should like to see better safeguarded, looked after and cared for. It will mean a better future for them and a better generation of women in the future. I ask the Home Secretary not to take over the torch of progress, and be satisfied with it, from his predecessor, but to try to burnish it and give it over to his successor a bit better than he found it.

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Short): We have listened to two very interesting speeches on an interesting subject which has engaged the attention of a number of Home Secretaries and has been investigated from time to time by a number of committees. Two committees as recently as 1920 and 1924 went fully into the question of the employment of women in the police forces and both recommended that, in so far as women could find employment in the police forces, the employment should be left entirely to the discretion of the local authorities. Successive Home Secretaries have carried out that recommendation, of which the hon. and gallant Gentleman particularly complained. The recommendation of those committees was confirmed in principle by the Royal Commission on Police Powers and Procedure, which reported as recently as March, 1929. While they did, I admit, express the opinion that there was room for an increase in the numbers so employed, they nevertheless emphatically stated that the question of employment should be left entirely to the discretion of local authorities. They said:
We recognise that any attempt to enforce the appointment of women police on those who are not convinced of their value would serve no useful purpose and only antagonise local opinion. We are, therefore, in general agreement with the policy hitherto adopted by the Home Secretary of leaving to local discretion the decision whether or not to employ women police, or to what extent, and in what ways.
I do not deny that scope exists for the employment of women in the police forces, and especially in those specialised spheres and duties which were particularly mentioned by the hon. Lady the Member for The Wrekin Division, but I think that if we sought, by legislation or by regulations, to enforce some definite establishment or employment of women police throughout the police forces of the country at this stage, having regard to our experiences and to public
opinion, we should retard rather than advance the interests of the women in this connection. Despite the views expressed by the committees to which I have called attention, my right hon. Friend did, however, decide to make a test with regard to this matter, and in March, 1930, he brought the question before the Police Council. The Police Council, it may be wise to remind the House, is an advisory body. It was appointed under Section 4 of the Police Act, 1919, and consists of the chief le-presentatives of the police authorities—the chief officers of police, superintendents, and the Police Federation representing all ranks, and the question was raised in such a way as to produce a most frank discussion and expression of opinion on the part of the council.

Major LONG: On a point of Order. May I ask if hon. Members are allowed to put their legs upon the benches?

Mr. SPEAKER: The seats are intended for Members to sit upon.

Mr. SHORT: I was saying before that interruption that the question was raised in a manner to ensure the widest discussion and the frankest expression of opinion respecting the appointment of police women, their duties, numbers and conditions of service and so forth, and the council came to the conclusion that the time had not come to embark upon any regulations which would prescribe their duties or require the employment of any given number, and they expressed the emphatic view that the employment of women police should be left to the discretion of local authorities.
The hon. and gallant Member opposite complained that my right hon. Friend is not willing to force, either by legislation or by regulations, the employment of women police outside London in the borough and county police. I think that I have given sufficient evidence to justify my right hon. Friend in pursuing a very cautious policy as far as any question of compulsion is concerned. As regards the number of women police, there are 50 employed in the Metropolitan Police Force, and my right hon. Friend has decided to increase the number to 100, and at this moment recruiting is proceeding. I cannot say when the total of 100 will be reached, but it indicates, at
any rate, a progressive and sympathetic attitude towards this question.
As regards counties and boroughs, they are at present employing 105 women police, and the further employment of these women must rest for the time being with the discretion of the local authorities. I made some reference just now to placing this question before the Police Council and the attitude they expressed. I am pleased to say that, despite that attitude, my right hon. Friend did submit a set of draft regulations to the meeting of the council on the 14th instant, and the council discussed them clause by clause, with such minor adjustments in relation to the employment of women as were in accord with the Baird and Bridgeman Committees. I am in a position to say that my right hon. Friend, I hope at an early date, will issue these regulations governing conditions of service, hours and the duties which these women will be called upon to perform, and setting out some standard such as I think hon. Members have in their minds.
Some reference was made to allowances and the treatment of women in so far as accommodation was concerned. I have not heard of any provision of barracks such as was suggested in the speech of my hon. and gallant Friend, but, as far as these regulations are concerned, we shall provide for the inclusion of rent allowances based on the main regulations governing men police. It is proposed that they should be provided with the necessary quarters rent free, or receive an allowance at the rate which is now operative for single men. I am not in a position to say what would be the rates of pay suggested in the regulations, because we have yet to complete our investigations and receive reports from the country. There are a variety of conditions operating, and until we can get them together collectively, I should be unwilling, and I hope I shall not be pressed, to make any statement regarding either the basic or starting rates. I can assure hon. Members that the Home Secretary has got this, as indeed other matters of equal importance which will be covered by regulations, under his personal observation. I have dealt with the first two points put to me by the hon. Member for The Wrekin Division, and I
turn to answer the third in which she suggested the appointment of an assistant woman inspector of women police to be attached to the Home Office.

Miss PICTON-TURBERVILL: The hon. Gentleman will remember that was the recommendation of the Bridgeman report.

Mr. SHORT: I think that the Baird Committee was in favour, and the Bridge-man Committee was against.

Miss PICTON-TURBERVILL: I think that the hon. Gentleman is mistaken.

Mr. SHORT: There was some slight reservation regarding the numbers, but, at any rate, there were three members in favour of the appointment, and three against. We have only 105 policewomen employed throughout the county and borough police forces of the country, and we are increasing the number in the Metropolitan Police to 100. The 100 in the provinces are scattered throughout the country; we have appointed a chief staff officer, Miss Peto, who is attached to the Metropolitan Police Force, and my right hon. Friend does not think that the existence of 100 women police, scattered throughout the country in the county and borough police forces, would justify at this- stage the appointment of an assistant woman inspector at the Home Office. The House will realise that if my right hon. Friend is in need of advice he can always call in Miss Peto, who is competent to give advice upon all matters appertaining to the employment of police women.
As regards the permanent appointment of Miss Peto, she was appointed in April, 1930, and the permanent appointment has been held over for another six months. I am entitled to say that my right hon. Friend is highly satisfied with the quality of the work that Miss Peto is rendering, but he does not think at this stage that we have had sufficient experience, and consequently he has delayed the permanent appointment of
Miss Peto. I have no doubt, however, and I am now expressing my personal opinion, that with the experience that must come as a result of Miss Peto's retention in the position, my right hon. Friend at some later date will have to consider the desirability or otherwise of making the appointment permanent. I have answered specifically the four points put by the hon. Member for the Wrekin Division.
Finally, I may say that my right hon. Friend in this matter has met not only those who are supporting the employment of a greater number of women police, but he has approached the entire problem in a progressive and sympathetic spirit. He realises that there are duties that rightly and properly fall to women throughout the police forces of the country, but he is anxious in promoting their greater employment and their greater usefulness in the service, to proceed cautiously, having regard to the recommendations of the two committees and the Royal Commission. The House may rest assured that my right hon. Friend is not antagonistic but sympathetic to the whole question of the employment of women police.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time, and committed to a Committee for the whole House for To-morrow.

EXPORTATION OF HOESES (No. 2) BILL.

Read a Second time, and committed to a Standing Committee.

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Mr. T. Kennedy.]

Adjourned accordingly at One Minute after Eleven o'Clock.